doi: 10.1111/j.1467-856X.2009.00390.

x BJPIR: 2010 VOL 12, 3–21

Adam Smith and the Grotian Theory

of Property bjpi_390 3..21

John Salter

In the theory of property, which he presented in his lectures in Glasgow in 1762–63, Adam Smith
moved decisively against the ideas of his Scottish contemporaries and near contemporaries, par-
ticularly with respect to the elements of their theories they had inherited from Locke. This article
explores the reasons behind this change in direction and discusses the use Smith made of Grotius’
theory of property in reformulating his own ideas. I argue that Grotius’ influence is evident in three
features of Smith’s theory: the account of property in the first age of society; the role of agreements
in the subsequent development of property; and the nature and scope of natural rights.

Keywords: Grotius; Smith; property; possession

In the Theory of Moral Sentiments (Smith 1976, hereafter TMS) Adam Smith writes of
Hugo Grotius that he:
seems to have been the first who attempted to give the world anything
like a system of those principles which ought to run through, and be the
foundation of the laws of all nations: and his treatise of the laws of war
and peace, with all its imperfections, is perhaps at this day the most
complete work that has yet been given upon this subject (TMS VII.iv.37).

One reason for Smith’s admiration of Grotius is that Grotius had made a clear
distinction between justice and all the other virtues and in his treatment of justice
he considered: ‘only what the person to whom the obligation is due, ought to think
himself entitled to exact by force’ (TMS, VV.iv.8). Grotius’ influence on Smith with
respect to the definition and scope of justice is well known and has been explored
in some detail in a number of published works. Much less attention, however, has
been paid to the influence on Smith of Grotius’ theory of property. It is Grotius’
successors, particularly Pufendorf and Locke, who are usually seen as the thinkers
who had the greatest influence on Smith and the other Scottish writers, largely
through the writing and teaching of Gershom Carmichael and Francis Hutcheson.

However, in his mature theory of property, which he presented in his lectures in

Glasgow in 1762, Smith moved decisively against the ideas of his Scottish contem-
poraries and near contemporaries, particularly with respect to the elements of their
theories they had inherited from Locke. In Part I, I explore the reasons behind this
change in direction and in Parts II and III, I discuss the use Smith made of Grotius’
theory of property in reformulating his own ideas.

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4 JOHN SALTER

I.

A. The Scottish Writers and the Labour Theory of Property

In De Jure Belli ac Pacis, which is the treatise referred to by Smith, Grotius had said
that private property was introduced by a kind of agreement, either expressed or
implied. Prior to this all things were ‘the common and undivided possessions of all
men, as if all possessed a common inheritance’ (Grotius 1925, I.II.I.5). It would
seem, from the research of James Moore and Michael Silverthorne, that in 18th-
century Scotland the theory that property was introduced by agreement was widely
associated with the theory of positive community. An agreement was needed to
dissolve the original common right before private appropriation was possible
(Moore and Silverthorne 1983; see also Moore 1980). Moore and Silverthorne
highlight the attempt by the Scottish writers to move away from this theory and to
replace it with a theory whereby private property originated with individual acts of
occupation of an originally negative community. They point, in particular, to the
influence of Pufendorf and Locke, as interpreted by Gershom Carmichael and Jean
Barbeyrac. Pufendorf, according to this interpretation, had taken the important step
of describing the state of nature as a condition of negative community ‘as contrasted
with the condition of positive community in which things were shared by men in
accordance with the agreement or consent of all members of the community’
(Moore and Silverthorne 1983, 81). But Pufendorf, ‘paradoxically’ from Carmicha-
el’s point of view, had retained the idea that private property requires an agree-
ment. Carmichael thought that:
a much better explanation of the origin of property in the state of nature
or of negative community had been provided by Locke: men may be
considered to own those things they have occupied by their labour,
without waiting on the consent or agreement of others (Moore and
Silverthorne 1983, 82).

Moore and Silverthorne argue that it was as a theory of occupation of unowned

things that Locke’s labour theory came to be either accepted or rejected by the
Scottish writers. And they further remark that ‘It was this formulation of the theory
which prompted Adam Smith, Henry Home and others to ask what kind of labour
or what sort of occupation men might have engaged in when they began to occupy
a hitherto unoccupied world’ (Moore and Silverthorne 1983, 82).

Frances Hutcheson was the central figure among those who accepted the labour
theory and Hume was its principal opponent.1 By the time Adam Smith gave his
lectures in Glasgow in 1762–63, Henry Home Lord Kames and John Dalrymple had
published important works on property, which attempted to incorporate the labour
theory of property into different versions of the stadial theory of development
(Dalrymple 1757; Home 1758a). And it would seem that at one stage in his career,
Smith was among the Scottish writers who accepted this labour theory. In a set of
notes that have been identified as a report of a course of lectures given by Smith in
Glasgow, tentatively dated by Ronald Meek to have been delivered sometime
between 1751 and 1754, property is explained in terms of two principles, both of
which appear in the writings of Kames and Dalrymple: first, ‘To deprive a man of
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life or limbs or to give him pain is shocking to the rudest of our species when no
enmity or grudge subsists’ and second, ‘We acquire a liking for those creatures or
things which we are much conversant with, and thus to deprive us of them must
give us pain’ (Meek 1976, 467). Smith uses these two principles to explain the
foundations of property in three successive stages of society:
To deprive a man of the beast or fish he has caught, or of the fruit he has
gathered, is depriving him of what cost him labour and so giving him pain,
and is contrary to the laws of the rudest society. By the second principle
when a clan or nation hunt and fish long (i.e. have lived long) in one tract
of country they acquire an exclusive property and it is considered as theirs
(Meek 1976, 467).

This is the ‘second state of perfection in society’ in which ‘arable ground and crops
are in common’ and there is no private property in land. The third state of society
is associated with the introduction of private property in land:
when their numbers increase, when instruments of husbandry are
invented, and when they have built huts and towns, they will begin to
labour little spots about their houses and the publick fields will be
neglected, and hence will arise private property in lands founded both
upon the first and second principle (Meek 1976, 467).

The theory that Smith presented in his lectures of 1762/3 differed from this earlier
theory in a number of crucial respects. Smith clearly abandoned his attempt to
explain the foundations of property in all the ages of society in terms of the two
principles he relied on in his earlier lecture course. Instead, Smith uses the theory
of justice he had worked out in the Theory of Moral Sentiments to explain the standard
Roman law rules of property acquisition, and he embellished this account with
some ideas he adopted from Hume’s attempt to apply his theory of the imagination
to the same subject. The most original part of Smith’s theory was his treatment of
occupation. He says that the principle of occupation is founded on the reasonable
expectation of using the object that is formed in the mind of the first taker and on
the opinion of an impartial spectator that an injury would be done if a second
comer were to take the thing from the first. In the first age of society property
acquired by occupation is confined to bare possession; it is only in the age of
shepherds that property gives us the right to recover the possession of a thing once
it is lost. The jump between the age of hunters and the age of shepherds is thus a
momentous one and it is accompanied by agreements. Without agreements, Smith
says, people could only form reasonable expectations of using things for as long as
they are kept within their power. Before people can engage in productive activities
that require more extended forms of ownership they must enter into agreements of
some kind. Agreements are also needed when property is extended further in the
subsequent ages of society. So beyond the first societies, which Smith describes as
people who ‘live according to the laws of nature’, property is conventional (Smith
1978, Lectures on Jurisprudence (B), hereafter LJ(B), 19).

Smith’s mature theory therefore represented a significant change in his own ideas
about property and a significant rejection of an important strand of thinking about
property which had taken root among his contemporaries in Scotland. The princi-
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6 JOHN SALTER

pal reasons for this change can, I think, be understood when we examine the way
in which the development of the four stages theory outgrew the explanatory
powers of the labour theory.

B. The Limits of the Labour Theory of Property

It is clear from the writings of Hutcheson, Dalrymple and Kames that the labour
theory was being used by the Scottish writers as the basis for a theory of natural
property rights, which they presented as an alternative to the theory that property
originated with a contract, one they associated with both Grotius and Pufendorf.
However, for none of them was the labour theory used as a theory of occupation.
Carmichael’s teaching had been ambiguous in this respect. On the one hand, in
arguing against Pufendorf’s theory that property must begin with a pact, he shows
a clear preference for Locke and refers the reader to chapter 5 of the Second Treatise
of Government. However, Carmichael follows this discussion with a traditional
natural law explanation of the Roman rules of property acquisition: occupation,
accession, succession and usucapion or prescription. Carmichael’s account of these
rules owes more to Grotius than to any other writer and there is no attempt to
incorporate the principle of labour into his explanations. Occupation of land, for
example, requires merely the entry on the place with ‘a declared intention of
occupying it’ and the occupation of moveable things such as animals can be made
by hand or by the use of instruments such as traps. In both of these cases Grotius,
rather than Pufendorf or Locke, is the authority. This is not entirely inconsistent.
Carmichael’s arguments about the significance of labour could be read in the
following way: it cannot be the case, as Pufendorf says, that occupation requires
agreement because God had intended the world and its resources to be used by
human beings in a beneficial and secure way. Most things that are useful require
labour, and if it were permissible for someone to take from us what we had taken
from the common and improved with our labour, they would be stealing the fruit
of our labour and that would be wrong (Carmichael 2002, 93–94). It is essential,
Carmichael concludes, that occupation gives us a right. Now this is not so much a
labour theory of occupation, in the sense that labouring is somehow the criterion
for a successful occupation, but an explanation of why there must be a right of
occupation.
In his System of Moral Philosophy Hutcheson also built his theory of occupation on the
traditional natural law argument which begins with the idea that the world was
originally a gift to all mankind from God and was thus intended for our use
(Hutcheson 1755, 330). He then argues, much as Grotius, Locke and Carmichael,
but not Pufendorf, had done, that if we take seriously the idea that God had
intended the material world to be used for our support, it follows that we must
have, at least, a right to make use of it. If it were allowable, Hutcheson argues, for
a second comer to frustrate the innocent impulse of the first, then it would be
allowable for a third to frustrate the second, and so on. The result of this would be
that God’s purpose in making the original grant would be entirely defeated.
Hutcheson reaches this important conclusion without reference to labour and he
concludes: ‘the first impulses of nature towards supporting ourselves, or those who
are dear to us, point out the right of the first occupant to such things as are fit for
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SMITH AND THE GROATIAN THEORY OF PROPERTY 7

present use’. Obstructing this innocent design ‘when there is enough for others’, an
obvious reference to Locke, is morally evil (Hutcheson 1755, 317).
However, population pressure meant that mankind could not continue to support
itself by using the world as it was. It was necessary to labour, and it is at this point
that Hutcheson brings in the labour theory to justify what he calls further rules of
property in shepherding and farming societies. Nature, he says, has given us powers
and ingenuity and a disposition to exert them in supporting ourselves and those we
love. We have a sense of the innocence of exerting our natural faculties and a sense
of resentment against anyone who would obstruct us in doing so. It is from these
strong feelings that we ‘discover the right of property that each one has in the fruits
of his own labour’. Thus Hutcheson says that there are two original methods of
acquiring property: ‘occupation and labour employed in cultivating’ (Hutcheson
1755, 324). In A Short Introduction to Moral Philosophy, however, Hutcheson had
taken a different approach. Instead of claiming the existence of two original prin-
ciples of acquisition, he provides his own gloss on the law of occupation, claiming
that the successful occupant is the person who has performed the most labour in
the chase or search for the thing. If two people have expended the same amount of
labour in acquiring an object it becomes jointly owned (Hutcheson 1747, 152–155).
In Carmichael and Hutcheson then, the labour theory makes its appearance in a
rather uncomfortable fashion alongside traditional natural law arguments about
occupation. The general purpose is to remove completely the idea that property
depended on agreements, and the labour theory was being used to buttress the
traditional arguments exactly at the points at which they seemed to need some
reinforcement by reference to agreements or conventions. In the writings of Kames
and Dalrymple, however, the natural law theory of occupation, together with its
premise that the world was originally a gift from God, drops out of the picture. God
continues to makes an appearance in the works of both Kames and Smith, but as
designer in the Stoic/deist form of the ‘Author of Nature’ rather than as a provider.
This means, among other things, that it was no longer possible to rely on this
premise to justify the first private uses of natural resources. In fact, Kames and
Dalrymple have very little to say about this as their primary interest is in landed
property after the invention of agriculture and it is in this context that they take up
the labour theory as it had been used by Hutcheson.
In Essays on the Principles of Morality and Natural Religion, first published in 1751,
Kames built his theory of property on the idea that man is fitted for labour and must
labour to survive. We have a natural disposition to support ourselves and our
families by our own labour, and this disposition, Kames says, involves the idea of
property: ‘The ground I cultivate, and the house I build, must be considered as
mine, otherwise I labour to no purpose. There is a peculiar connection betwixt a
man and the fruits of his industry felt by everyone, which is the thing we call
property’. Given this disposition to support himself by his own efforts, ‘man would
be an absurd being’ without this sense of property and he would be an imperfect
one if he did not acknowledge the same disposition in others (Home 1751, 105).
The idea of property, then, springs from inclinations and dispositions that are
natural to man and implanted in him by the Author of Nature. This is illustrated,
Kames says, by the fact that however far back we go in human history we find that
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people always had their own property. However, at this stage in the development
of his ideas, Kames thought that even in the earliest times people had kept cattle:
‘For even before agriculture was invented when men lived upon the natural fruits
of the earth, tho’ plenty of pasture made separate possessions unnecessary, yet
individuals had their own cattle, and enjoyed the produce of their cattle separately’
(Home 1751, 107).

In An Essay towards a General History of Feudal Property in Great Britain, published in

1757, John Dalrymple focused, as Kames had done, on landed property. He argued
that agriculture leads men to bestow thought and labour upon land and this
‘increases their connection with a single portion of it; this connection long contin-
ued, produces an affection; and this affection long continued, together with the
other, produces the notion of property in land’ (Dalrymple 1757, 88). The signifi-
cance of this work is not that it adds anything to Kames’ attempt to explain the basis
of the natural right of property, but that it is regarded as the first appearance in
English of the four stages theory. Much scholarly attention has been given to the
question of whether Dalrymple’s version of the stages theory includes a clear
statement of a fourth stage, but for our purposes the most important point to note
is that it includes a clear statement of a first stage of hunters and fishers prior to
pasturage. Hutcheson had referred to such an age in his account of occupation but
had followed Grotius in saying that this first age was followed by pasturage and
farming together. Kames had distinguished pasturage from farming but had failed
to distinguish clearly an age of hunters, fishers and gatherers prior to shepherding.
However, having introduced, or reintroduced, the age of hunters and fishers,
Dalrymple passes over it with the remark that property will be confined to mov-
ables with immovables held in common, and there is no discussion of whether the
principles that explain property in movables in this age differ from the principles
that explain property in immovables in the subsequent ages.

In the 1758 edition of his Essays Kames made a number of significant revisions to
his account of property. Men, he now says, originally supported themselves by
hunting and gathering. However, this was an unnatural state for man who was not
designed to be an animal of prey. He needs regular supplies of food and so he turned
to shepherding and then to farming. Kames explains this early progress of man in
terms of a hoarding disposition that he shares with some other animals, and it is this
hoarding disposition that does much of the explanatory work that was done by the
disposition to support ourselves through labour in the 1751 edition. However, he
concludes, much as before, by declaring:
The cattle tamed by an individual, and the field cultivated by him, were
held universally to be his from the beginning. A relation is formed betwixt
every man and the fruits of his labour; the very thing we call property.
Yours and mine are terms in all languages, familiar even among savages
(Home 1758a, 80).

But despite the fact that Kames here says that the idea of property is known to
savages, there is still no satisfactory account of property in the first age of society.

It had become apparent by the second edition of Kames’ Essays that there was a
major problem in combining a stadial account of property with a theory of the
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natural right of property that depended upon a natural human disposition. The
gradual emergence of three distinct stages was bringing to light the fact that
property differed between stages in terms of the rights and powers it conferred on
the property holder. A labour theory of property, however, or one that depended on
a hoarding disposition, seemed incapable of allowing for these differences. This
became clearer still with the publication in 1758 of Kames’ Historical Law Tracts. In
this work there is an explicit appearance of a first stage of hunting, which is not
relegated, as before, to an unnatural prehistory of man. Moreover, Kames now says
that property exists in this first age, and that it is the product of art and industry, by
which the hunter and fisher acquire ownership by occupancy in their catch, and
also by another principle, the principle of appropriation that replaces the hoarding
principle. However, Kames now also explicitly brings to the fore the fact that
property in the first age does not extend beyond possession. The introduction of
shepherding extended property somewhat beyond possession and the introduction
of property in land extended it still further. To account for these developments
Kames now turns to a completely different kind of explanation. Savages, he says,
are incapable of abstract thought and cannot conceive of the idea of property
beyond actual physical possession. They cannot distinguish moral powers from
physical powers and so property is lost whenever it cannot be physically defended.
Shepherding extends the powers and scope of property because the connection
between the shepherd and his animals creates a bond between them that lasts
beyond actual physical possession. But it is with the invention of agriculture and
the beginnings of a settled way of life that property finally becomes detached from
possession (Home 1758b, 56).
The problem Kames now faced was clear. If labour, or the disposition to hoard or
appropriate, or some other natural principle was the explanation of the natural
right of property, why do property and the powers it gives differ so much in the
different ages, and why, in particular, is property confined to possession in the first
age? Kames’ attempt to graft on to his natural rights theory the Humean idea that
our moral ideas are the result of impressions on the mind that become more
complex as our experience of the world develops, is hardly a satisfactory solution.
What was lacking from the theories of Kames and Dalrymple was an explanation of
the basis of property in the first age of society, and an explanation of how property
developed over time. It was the need to answer these two questions, I suggest, that
prompted Smith to reformulate his own ideas on property in relation to the four
stages theory, and in doing so, to adapt ideas he found in the theory of Grotius.

II: Hugo Grotius

In De Jure Belli ac Pacis, Grotius begins his account of the origins of private owner-
ship by saying: ‘Soon after the creation of the world, and a second time after the
Flood, God conferred upon the human race a general right over things of a lower
nature’. All things were then ‘the common and undivided possessions of all men, as
if all possessed a common inheritance’. As a consequence of this general right,
which Grotius says took the place of private ownership, each person could take
whatever he wanted for his own needs and what had been taken ‘another could not
take from him except by an unjust act’ (Grotius 1925, II.II.II.1). In Mare Liberum
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10 JOHN SALTER

Grotius had said that this right to use the earth’s resources was a limited kind of
sovereignty, which amounted to ‘the privilege of lawfully using common property’
(Grotius 1916, 23). He notes that the civil law concept of a use right is a particular
right held against another person. However, the right to use the fruits of the
common without owning the substance of things could, by analogy, be understood
as a kind of use right. Under Roman law, however, the right to use the fruits of
another person’s property carried the obligation to preserve the substance. Strictly,
therefore, there could not be a use right, as Justinian says, in things ‘such as are
actually consumed by use’ (Justinian 2004, Institutes: II, 2.4).2 Grotius is alluding to
this feature of Roman law when he remarks that since ‘there are some things, the
use of which consists in their being used up’ it became apparent that ‘a certain kind
of ownership is inseparable from use. For “own” implies that a thing belongs to
some one person, in such a way that it cannot belong to any other person’ (Grotius
1916, 24).3

In De Jure Belli, Grotius changed this characterisation of the primitive use right. The
emphasis was no longer on the distinction between using and using up, but on the
difference between uses that entailed actual physical possession and uses that
required extended control over objects such as flocks or land. The exercise of the
primitive right to use the common must begin with the actual seizure of the thing,
that is, with ‘the connexion of body with body’ and it continues only so long as this
connection is maintained (Grotius 1925, II.VIII.VI). Grotius illustrates the way
the primitive right worked by citing the famous example of the public theatre:
‘Although the theatre is a public place, yet it is correct to say that a seat which a
man has taken belongs to him’ (Grotius 1925, II.II.II.1). The primitive right is thus
confined to use and to uninterrupted possession. It was therefore adequate only so
long as men were content to live a simple life, that is, as long as they were content
to ‘to feed on the spontaneous products of the earth, to dwell in caves, to have the
body either naked or clothed with the bark of trees or the skins of wild animals’
(Grotius 1925, II.II.II.4).

People left the primitive stage of simplicity because they desired a more refined way
of life, and this led to the invention of agriculture and grazing and some ‘inter-
change of commodities’ (Grotius 1925, II.II.II.2). Specialisation created rivalry and
then, as the number of men and flocks increased, to scarcity. As a result, the
primitive right was inadequate to preserve harmony and private ownership was
introduced. Private ownership differs from the primitive right in the following
respect: both must begin with an actual seizure, but ownership that arises from
private property ‘is not lost when possession is lost; rather, ownership gives us the
right to recover possession’ (Grotius 1925, II.VIII.III). In most cases, the right to
recover possession exists as long as the ‘intention to possess is maintained’ and as
long as this intention is clearly indicated in ways that others recognise (Grotius
1916, 25). Thus, shepherds must mark their flocks in some way to indicate that they
regard them as their own and that they intend to recover possession. And in the
case of land, erecting buildings or fences to determine boundaries is required to
indicate that occupation is permanent (Grotius 1916, 26).

In Mare Liberum Grotius says that this transition ‘did not come violently, but
gradually, nature herself pointing out the way (Grotius 1916, 24–25). And in his
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defense of chapter V of Mare Liberum against William Welwod’s criticisms, he says

that property in things other than the sea ‘became private property through nature’
(Grotius 2004b, 81). To establish these claims Grotius starts from his observation
that the idea of ownership is inseparable from the primitive right of use, and then
argues that this idea of ownership was extended, by a logical process of reasoning,
from things which by use ‘become part of the very substance of the user’ and can
never be used again, to things such as ‘clothes and movables and some living things’
which, although not used up, ‘become less fit for future use’. Grotius says that after
the first extension had come about, ‘not even immovables, such, for instance, as
fields, could remain unapportioned’ (Grotius 1916, 24–25). A law was subsequently
established to codify this established practice: ‘When property or ownership was
invented, the law of property was established to imitate nature’ (Grotius 1916, 25).

Now Grotius’ attempt to argue that property in land is simply a logical extension of
the natural use right is undoubtedly the weakest part of his theory in Mare Liberum.
The implications of this change are momentous because the private ownership of
the substance of the common, as opposed to the fruits, fundamentally changes the
terms on which human beings can provide for their own subsistence. Grotius
realised the implications of this early in the development of his ideas and in his
reply to William Welwod he says that in cases of necessity, when people lacking the
natural right to use natural resources face starvation, the things that had become
private property revert to common property. However, the obvious problem is how
this argument can be maintained alongside the, as yet unqualified, natural right to
acquire property. A further problem with Grotius’ argument in Mare Liberum is that
he clearly acknowledges that occupation is inherently conventional in the sense
that it depends on social recognition of the actions or signs that constitute a
successful and valid occupation.

Grotius resolves both of these problems in De Jure Belli when he says that aban-
donment of common ownership and the transition to private ownership were
accompanied by agreement. It could not come about,
by a mere act of will, for one could not know what things another wished
to have, in order to abstain from them—and besides several might desire
the same thing—but rather by a kind of agreement, either expressed, as by
a division, or implied, as by occupation (Grotius 1925, II.II.II.5).

Grotius then argues that the agreement that introduced private ownership, like all
agreements, must be interpreted in the light of what we know or can infer about
the intentions of the parties involved. And he says that ‘we are forced to believe,
that it was their intention to depart as little as possible from natural equity’. It
follows that in direst need ‘the primitive right of user revives, as if community
ownership had remained’ (Grotius 1925, II.II.VI.2).4 Grotius could now consistently
claim that for people who faced starvation the original common right of use
revived. This gave them a right to take what they needed from the surpluses of
property holders.

It is important to stress, against interpreters who have tried to downplay the

importance of the agreement in Grotius’ mature theory in order to ascribe to him
a natural rights theory of property, that the right of necessity depends on the
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existence of such an agreement. Without it, those who have not acquired their own
property through either division or occupation face starvation.

III: Smith

A. Property and Possession in the First Age of Society

Grotius had used a wide range of sources to construct his theory. To establish his
initial premise that natural resources were originally subject to common ownership
he referred to poets, philosophers and historians, and in De Jure Belli, to the Bible.
He then relied primarily on Roman private law, and in Mare Liberum also on
medieval theologians and lawyers, to achieve two things: to provide an interpre-
tation of common ownership in terms of the use right that it implied for individuals,
and to interpret the Roman law of occupation as an explanation of the origins of
private property as an institution.
For Smith, as for the other Scottish writers after Hutcheson, there were no anterior
rights that could explain a primitive right of use, and Smith builds his theory
exclusively on the basis of Roman legal remedies. In particular, Smith says that the
first uses of the world in hunting and gathering societies were explained by the
Roman law principle of occupation. However, occupation under the Roman law
required two things: physical attachment (corpus), and the willingness or intention
to have the thing as one’s own (animus), and this latter element was dependent
upon social recognition. This is why Grotius eventually came to the view that when
the principle of occupation was introduced, it had to be accompanied by an
agreement.
One solution was to bring the agreement forward in time as Pufendorf had done.
However, an alternative presented itself to Smith in the form of the Roman law
disputes about the application of the concept of occupation in the case of the
capture of wild animals. The central question here seemed to be how far the
intention to have and use the thing could be inferred without actual physical
attachment. While this was a controversial question, the standard view was, as
Grotius reports in De Jure Belli, that ‘wild animals cease to be our property as soon
as they regain their natural liberty’ (Grotius 1925, II.VIII.III). Similarly in Mare
Liberum he had said that occupation or possession in the case of things, such as wild
animals, that resist seizure ‘must be uninterrupted or perpetually maintained’, and
that these cases differ from most other things where it is possible to indicate one’s
intention to maintain ownership after the initial seizure (Grotius 1916, 25). This is
elaborated in De Jure Belli where Grotius says that ownership is not lost simply
because the animal has escaped, any more than we would lose ownership of a
runaway slave. Rather it is because of ‘the natural inference that we have aban-
doned ownership on account of the difficulty of pursuit, especially because the wild
animals which belonged to us cannot be distinguished from others’ (Grotius 1925,
II.VIII.III). He says that a thing once possessed is lost ‘if the hope of its recovery is
abandoned’ and this is judged to be the case when ‘recovery seems impossible; that
is, in cases in which there is no reason why any one should be expected to retain
the thought of ownership, when no indication of such an intent exists’ (Grotius
1925, II.IV.V.1).5
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Now according to Grotius’ interpretation of the Roman law, hunting was an

exception to the general rule governing occupation. But it showed that the corporal
element of physical attachment alone, that is, the bare possession of the object, was,
in this case at least, enough to indicate that the possessor had both the intention
and a reasonable expectation of having the thing as his own for as long as he
retained effective control. What I think Smith came to realise was that the Roman
concept of occupation of wild animals could be used as a model for the most
primitive forms of property. A legal distinction that had distinguished hunting from
other acts of occupation could be used as a historical distinction for identifying a
separate age of hunting. Initially therefore all things were regarded in the same way
as wild animals continue to be, and ownership did not extend beyond possession.

Smith thus attempted to construct a theory of property in the age of hunters from
the resources of the Roman law, and it is in this context that his discussion of
occupation in the case of wild animals in the Lectures on Jurisprudence assumes a
significance beyond a routine treatment of a standard topic of law. He begins this
discussion of occupation, however, with the general assertion that ‘property in a
subject is not conceived to commence till we have actually got possession of it’
(Smith 1974, Lectures on Jurisprudence, hereafter LJ(A), i. 38). As we have seen, this
principle had also been affirmed by Grotius, who had originally used it in Mare
Liberum as part of his case against the claims of the Portuguese to the lands of the
East Indies and to the exclusive use of the sea for navigation (Grotius 1916, ch. 5;
1925, II.VIII.III and IV; cf. Pufendorf 1934, IV.VI.8–10). But it was by no means the
standard view, except in the case of wild animals. The significance of the principle,
as a general principle of property acquisition, is that people cannot be said to have
rights to things growing on the common or to animals in their wild state before they
are captured, or to the land itself, prior to physical appropriation. Property titles
cannot be acquired by the performance of labour or by the mere intention to take
or have the thing, or indeed by discovery, a point that Grotius made in his case
against the Portuguese. This is a point of considerable importance in Smith’s
adherence to the Grotian conception of justice, in which property rights were rights
in what we have or possess (ius in re) rather than rights to one’s due (ius ad rem).6

Smith, however, having stated the principle that occupation begins with actual
possession, immediately proceeds to a discussion of the Roman laws of hunting.
He upholds the majority opinion, as Grotius had done, that property acquired by
occupation of wild animals must always begin with actual possession. He considers
some different legal opinions and some exceptions, but concludes that ‘property
was conceived to commence when the subject comes into the power of the captor’
(LJ(A), i. 38–40).7 Hutcheson, having argued that the right of property is a right that
we have in the fruits of our labour, was committed to the alternative view, as Locke
had been, that the property of the hunter begins when he has wounded or tired the
animal (Hutcheson 1755, 325–326; see also Hume 2007, 3.2.3.7., fn. 73). It is
important to stress here that Smith was returning to the older and more dominant
tradition of the Digest and of the modern natural law tradition for which the Digest
was such an important source.8

Smith then asks ‘how long and in what circumstances property acquired by occu-
pation continues and at what time it is supposed to be at an end’. Now it is really
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14 JOHN SALTER

only at this point that the reader of the lecture notes, and perhaps also Smith’s
students, realise that Smith is giving historical answers to the questions with which
he begins his discussion of property rights. Up until this point Smith’s discussion of
occupation has all the appearances of a standard treatment of a standard topic of
Roman jurisprudence and he covers the same ground and comes to much the same
conclusions as Grotius had done. But it becomes apparent that his discussion is a
historical one when he says: ‘At first property was conceived to end as well as begin
with possession’. Smith then proceeds to elaborate on the extent of property in the
first age of hunters. In general, he says that a thing was not considered to be ours
once we had lost the immediate possession of it. For example, if having pulled an
apple from a tree, ‘I should happen to let it fall, and an other should snatch it up’
this would be a ‘very heinous affront’ but not a breach of property. Similarly, a wild
animal that escapes ceases to be the property of the one who captured it. Once the
animal escapes ‘I can have no longer any claim to it any more than to any other
wild animal, as there is no greater probability I should snatch it’ (LJ(A), i. 41–44).
Smith thus reaches the same conclusion as Grotius that in the case of hunting wild
animals, property ends as well as begins with possession. But Smith has trans-
formed a standard legal discussion of a particular activity into a discussion of
property in a particular historical age and he concludes with the remark: ‘In this age
of society therefore property would extend no farther than possession’ (LJ(A),
i. 44).

B. The Development of Property and the Role of Agreements

Smith’s account of the departure from the primitive state of hunting and gathering
has much in common with Grotius’ discussion of the extension of the simple use
right to the right of property. The crucial development is that people can lay claim
to things without having to maintain physical possession. Grotius had said that after
the first extension of ownership ‘not even immovables, such, for instance, as fields,
could remain unapportioned’ (Grotius 1916, 24–25). Smith says that the step
between a society of hunters and one of shepherds is ‘the greatest in the progression
of society. When this is once established, it is of no great difficulty to extend this
from one subject to another, from herds and flocks to the land itself’ (LJ(A), ii. 97).
In this way property would ‘in time, be extended to almost every subject’ (LJ(A),
i. 53). Both authors associate this departure with agreements: people agreed that
ownership of a thing, once seized, could continue without uninterrupted possession
for as long as the intention to recover possession was indicated and regarded as
reasonable. Flocks and other movables were the first things to become subject to
this extended form of ownership followed by the occupation of whole territories by
peoples and, finally, the allotment of land by division.
Grotius had emphasised that the introduction of conventional property was a
gradual process, and that it was patterned on the natural right of use. Smith
elaborates on this account by arguing that the gradual nature of the development
of property is accompanied by the development of the human imagination, an idea
that Smith undoubtedly took from Hume. Property always expresses the idea of
human control over the world but it is only in the first age of society that it is a
direct physical relation between a person and a thing. It is in shepherding societies
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SMITH AND THE GROATIAN THEORY OF PROPERTY 15

that property is first extended beyond possession. It is then that people agree ‘that
a cow or a sheep shall belong to a certain person not only when actually in his
possession but where ever it may have strayed’ (LJ(A), iv. 21). Initially this exten-
sion of property was confined to what could be understood as being within the
power of the shepherd and thus only to those animals that had the habit of
returning: ‘They considered therefore all animals to remain in the property of him
to whom they appertaind [sic] at first, as long as they retain’d the habit of returning
into his power at certain times’ (LJ(A), i. 46). Eventually this limit was broken and
it was enough that the animal was distinguished in some way to indicate that the
possessor regarded the thing as his.
There are also important similarities between the two accounts of the privatisa-
tion of land. Common ownership of land is first abandoned when whole nations
‘divided off countries and possessed them separately’ (Grotius 1925, II.II.II.3).
Grotius says that this happened as a result of the increase in the number of men and
flocks, which necessitated the allotment of land to individual families. As popula-
tion grew settlement became dispersed and this hindered ‘the gathering of the
products of the soil into a common store’. This process of occupying land in some
cases took place by free occupation by individuals. But in most cases it was the
result of an explicit division (Grotius 1925, II.II.II.3 and II.II.IV). Smith similarly
says that private property in land ‘never begins till a division be made from
common agreement. Moveable property may be occupied in the first beginnings of
society, but lands cannot be occupied without an actual division’ (LJ(B), 151).
Smith says that historical records confirm this account, but he also provides an
explanation in terms of his evolutionary theory. He says that the jump from
individual acts of occupying movables, or immovables like huts and houses, to
individual occupation of the land was too great to be bridged by the imagination of
men in the age of shepherds. Occupation of land began with whole nations of
shepherds taking possession of large territories. As long as people lived a nomadic
life, the thought of ownership in land did not extend beyond short periods of time:
‘They would not easily conceive a subject of such extent as land is, should belong
to an object so little as a single man’. The habitation of hunters and shepherds is
frequently changing and property in the land on which they build their huts was
thought to end when they were left just ‘as the seats in a theatre or a hut on the
shore belong no longer to any person than they are possessed of them’. Even the
invention of agriculture did not immediately necessitate private property. Private
property in land was introduced as a result of peoples fixing their habitation and
building cities. After people settled their habitation and acquired private property in
dwellings, they would naturally wish to cultivate the fields nearest to where they
lived, and under such conditions it was easier to make a division of the land rather
than ‘be put to the unnecessary trouble of dividing the product every year’. Thus,
‘the principle persons of such a community, or state, would divide the common
land into separate portions for each individual or family’ (LJ(A), i. 49–52).

C. Natural Rights
In the prolegomena to De Jure Praedae (Commentary on the Law of Prize and Booty)
Grotius had derived two precepts of the law of nature from the will of God: ‘It shall
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16 JOHN SALTER

be permissible to defend one’s own life’ and ‘It shall be permissible to acquire for
oneself, and to retain, those things that are useful to life’ (Grotius 2006, 23). The
right to acquire what we need initially amounted to a right to use the common.
After the introduction of private ownership it became a ‘right of occupation’.
In Mare Liberum both these rights are natural rights because they are derived from
the law of nature and they are possessed by all men equally. Grotius says they
are ‘expressed under the term “natural community” ’ (Grotius 2004b, 85). Natural
rights pertaining to property are thus the rights we possess in the state of natural
community and they are rights to the common. They can both be understood as
natural rights in the sense that in exercising them we are exercising rights we are
born with. In one case it is a natural right to use things on the common and in the
other case it is a right to acquire (occupy) things as private property.9 However,
private property is not a natural institution and Grotius quotes Cicero who says:
‘there is nothing private by nature’. For things to become the private property of an
individual ‘some deed of the man should intervene’ (Grotius 2004b, 85). The
account of property in De Jure Belli, however, entailed a significant qualification of
the idea of a natural right to acquire private property. Natural property rights
continue to play an important part in Grotius’ theory in the form of the original use
right and the right of necessity. But the right of occupation, the right to occupy,
becomes a conventional right.
Grotius’ contention that things are not private by nature, and that people acquire
property through some deed, was accepted by all the theorists we are discussing in
this essay. But the distinction between natural and conventional rights divided
them. Pufendorf thought that all property rights are conventional and even the first
and simplest uses of the earth’s resources required a pact of some kind (Pufendorf
1934, IV. IV.4). Carmichael, Hutcheson and the Scottish writers prior to Smith, with
the obvious exception of Hume, attempted to recast all property rights as natural
rights. The position that Carmichael and Hutcheson adopted is essentially the same
as that outlined by Grotius in Mare Liberum, although given the publication history
of the main work (De Jure Praedae) in which Mare Liberum first appeared as a
chapter, it is not likely that there is any direct influence.10 The position was that
there is a natural right to use the common and a natural right to acquire private
property through occupation. Hutcheson says that both of these rights are part of a
more general right, which he calls natural liberty, which is essentially the natural
right of innocent use of our natural faculties. Property itself, however, is an
acquired right because it requires, as Grotius said, the intervention of a human deed
(Hutcheson 1755, 293; Carmichael 2002, 77–78).
However, Carmichael and Hutcheson misleadingly used Pufendorf’s terminology of
natural rights and adventitious rights. Pufendorf had distinguished between con-
genital and adventitious obligations. The former are those that attach to ‘all living
beings endowed with reason’ as opposed to the latter, which are ‘laid upon men by
reason of some antecedent deed, with their express or presumed consent’ (Pufen-
dorf 1934, III.4.3). The basis for Pufendorf’s distinction was the different sources of
authority and the essential feature of an adventitious obligation was consent. In
contrast, congenital obligations are imposed by God. Pufendorf’s purpose was to
establish the existence of natural law and to do this he argued that not all obliga-
tions arise from consent when men enter political society. In the natural or pre-
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political state men are under the authority of the natural law, which consists in the
obligations imposed by God. Now in terms of rights this means that in a state of
nature there are natural or congenital rights that correlate to the duties imposed on
us by God, and that in adventitious states there are, in addition, what we may call,
although Pufendorf did not, adventitious rights—rights that have their origin in
agreements.
The adoption of Pufendorf’s terminology of adventitious rights by Carmichael and
Hutcheson was clearly inappropriate for their purposes, but it is clear enough that
they are simply using it to denote the much broader category of acquired rights.
Smith, however, who inherited the chair of moral philosophy in Glasgow, as well
as Hutcheson’s teaching duties, adopted the same terminology but added his own
twist, which has been doubly confusing for interpreters. Smith describes adventi-
tious rights as rights that belong to a man as a member of a family or as a member
of a state. Natural rights, by contrast, are those that belong to ‘a man as a man’. This
classification no doubt served Smith’s purposes in dividing the presentation of his
subject-matter into private law, domestic law and public law, much as Hutcheson
had done. But it is unhelpful in conveying the essential features of the theory of
rights he developed in his lectures. Given Smith’s translation of Pufendorf’s classi-
fications, it is obvious that he must classify property rights as natural rights, as he
does in LJ(A). We do not own property by virtue of our membership of a family or
state or any other social institution, and we do not have to enter any social or
political institution before we can become property holders. On the other hand, for
Smith, as for the other theorists, property is acquired.11
However, if we look behind Smith’s unhelpful terminology we see that his theory
of property indicates the same distinctions that are found in De Jure Belli. In the first
age of society, in which ‘people live by the laws of nature’, there is a natural right
to occupy and use things as long as possession is maintained. But for the right of
private property to extend beyond possession an agreement is needed. So property
rights for Smith, as for Grotius, are natural rights in the first age of society but
conventional thereafter.
For Grotius, however, natural rights are natural because they are derived from the
natural law, which in De Jure Praedae at least, Grotius derived from the will of God.
In Smith’s theory natural law is replaced by human sentiment as the foundation of
our rights, and property rights depend upon a certain kind of social recognition: we
only have a property right to a thing because an impartial observer concurs with
our expectation of having the exclusive use of it.
But this does not make all Smith’s rights conventional rights. Smith thinks that the
bare possession of a thing is enough to generate the reasonable expectation of use
on which the right of property is based. The physical power over an object by one
individual produces a moral power as a necessary and natural consequence of the
sympathetic reaction of an impartial spectator to any attempt by another to take the
object from the possessor. Moreover, this sympathetic reaction of the impartial
spectator is not mere passive acquiescence. The attempt by the second comer to take
what is already possessed engages the sympathy of bystanders in a way that
prompts them to intervene. It arouses sympathetic resentment and the consequent
desire to defend the victim and punish the offender. This is an idea that comes very
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close to Grotius’ and Locke’s idea of a natural right to punish (Grotius 2006, 132).12
It is also the crucial point in understanding how the moral effect produced by
possession is a perfect right in the sense explained by Grotius (Grotius 1925,
I.IV–VIII).

Conclusion
Duncan Forbes remarked that ‘what Grotius and Pufendorf wanted to stress was
that property in its very nature implies agreement between men’ (Forbes 1985, 27).
What makes the theories of Hutcheson, Kames and Dalrymple so different from the
theories of both Grotius and Pufendorf is the fact that they entirely eliminate
consent from the story. In this respect Smith was closer to Grotius and Pufendorf
than he was to his contemporaries. But Smith’s similarities with Grotius go much
deeper. For both Grotius and Smith there was an original state of the world in
which the only economic activities were hunting and gathering and in which
property began and ended with possession. Agreements are needed at the point
when people begin to engage in activities that necessitate an extension of their
control over the world. The extension of property, first to movables and then to
land was a gradual process, not just in the sense that it involved a series of steps,
which was a commonplace in natural law theories, but because it entailed an
expansion in men’s conceptual powers. Because they thought that a limited idea of
ownership existed in the first societies prior to agreements, they were able to
provide a genuinely evolutionary history that is more than just a series of agree-
ments as it is, for example, in Pufendorf’s theory.
However, the theological and scriptural background to Grotius’ theory, which is
entirely missing from Smith’s, reflects a crucial difference in their conceptions of the
relationship between mankind and the natural world. The transition from the
natural state was brought about, in Grotius’ account, by a desire for a more refined
way of life and only subsequently by the increase in population. Since Grotius
understood the world as a gift from God, it was unthinkable that, as long as men
remained in the natural and simple state in which God had made them, there could
be an insufficiency of resources to satisfy their needs. The refinement in wants, as
it is presented in De Jure Belli, is inextricably bound up with the Fall and corruption
of mankind, and the introduction of private property is closely connected with
God’s renewal of the world after the Fall. It would not have been necessary if men
had remained the way God made them but it became necessary as a result of diverse
and superfluous wants. For Smith, the driving force of change is confined to
population growth. The introduction of shepherding, and later agriculture, were
the products of man’s inventiveness in overcoming scarcity, not to a refinement in
their wants.
Moreover, Grotius’ theory was, in essence, a two-stage theory: shepherding,
farming and commerce were introduced together. This was a transition from a state
of nature or natural liberty to the state of private property. Smith added more detail,
although not necessarily greater historical accuracy, in building his theory around
the four-stage model that has been the focus of so much scholarly attention. Smith’s
originality in being the first to present a clear articulation of that theory, which once
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SMITH AND THE GROATIAN THEORY OF PROPERTY 19

preoccupied scholars, seems highly questionable in view of the content of his early
Glasgow lectures. It is, in any case, a question of secondary importance. But if what
I have argued in this article is correct, Smith was the first thinker successfully to
have used this four-stage theory in explicating the foundations and historical
development of property. And his greatest debt was to Grotius.

About the Author

John Salter, Manchester Centre for Political Theory, School of Social Science, Arthur Lewis
Building, University of Manchester, Manchester M13 9 PL, UK, email: john.salter@manchester.ac.uk

Notes
1. Throughout this essay references to the labour theory of property are to the theory that explains the
basis of the right of property in terms of a connection between people and the fruits of their labour.
It is not intended to refer to Locke’s theory of labour mixing.
2. Justinian also says: ‘For convenience sake, however, the senate enacted that a usufruct could be
created in such things’ (Institutes, II.IV.2).
3. The other important context for these remarks of Grotius is the controversy on mendicant poverty
surrounding the decree Exiit of Nicholas III between Pope John XXII and the Franciscans, and also the
related disputes between 16th-century theologians. Grotius’ references are to: Digest VIII, 5; Extrava-
gantes of Pope John XXII, XIV, 3 and 5; Thomas Aquinas, Summa II, II, q. 78. For discussion see Kilcullen
(1998); Tierney (1997, 329–332).
4. For a discussion of Grotius’ right of necessity see Salter (1999 and 2005).
5. Grotius is providing his own gloss here. He is incorporating evidence from non-Roman sources, such
as the law of the Hebrew Jurists.
6. However, Grotius, at least initially, had tried to argue for this restriction from general principles. The
exercise of the original use right requires that individuals took what they needed from the common
and so must establish physical possession. In Mare Liberum he had said that the law on occupation was
an imitation of this natural state of things and thus provided some reason why the law on occupation
required an initial physical attachment. In De Jure Belli, however, this strategy was not available to
Grotius because he now said that property begins with an agreement, and this raises the question that
Pufendorf was to ask: if occupation is conventional, why cannot people agree on whatever restrictions
they want?
7. The principle Roman source is Book 41 of the Digest, esp. D. 41.1.5.1. In LJ(B) Smith is reported to
have summarised the views of the lawyers by saying, inaccurately, that ‘all agree that it is a breach
of property to break in on the chase of a wild beast which another has started, though some are of
the opinion that if another should wound the beast in its flight he is entitled to a share, as he rendered
the taking of it more easy upon the whole’ (LJ(B), 459–460). Smith does not present his own views
here.
8. Samuel Fleischacker thinks that Smith is breaking new ground here and that the impartial spectator
provided him with a philosophical principle (implicit in Hutcheson) ‘by which to define’ the rules of
property. However, Fleischacker is confining the historical context to a comparison with Locke,
Hutcheson and Hume and thus fails to see that Smith is adopting the traditional view of the Roman
lawyers and of Grotius. Fleischacker accurately perceives that Hutcheson’s real emphasis is on the
intentions of the first taker, despite the references to labouring, but again fails to see that this is
straight out of Grotius. See Fleischacker, 2004, 187. Smith’s originality consisted in using his ideas of
sympathy and the impartial spectator to provide a philosophical interpretation of standard Roman law
rules of property.
9. See Tierney (1997) for the alternative view that Grotius thinks the rights in question are established
by the initial act of consumption. For an extended discussion of this question see Salter (2001,
537–555).
10. For a discussion of the publication history of these works by Grotius see David Armitage’s introduc-
tion to Grotius (2004a).
11. In the lecture course of 1766 (LJ(B)), Smith is reported to have said that property rights are
adventitious. Haakonssen (1981) thinks that the student who reported Smith as saying that property

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20 JOHN SALTER

rights are natural in LJ(A) had made a mistake (p. 100, fn. 10) However, Haakonssen is assuming that
Smith loosely identified adventitious rights with acquired rights as Carmichael and Hutcheson had
done, even though Smith cites Pufendorf as the source of the distinction. The discussion at LJ(A),
ii. 93 suggests that this is the case, and it is plausible if we are prepared to assume that Smith had not
read Pufendorf thoroughly, or that he was being careless in his references, and that he was simply
following Hutcheson. However, Smith equated adventitious rights with those rights we possess as
members of a family or state, and he could hardly mean that property rights are rights we possess as
members of families or states. As Haakonssen suggests, Smith’s use of these distinctions is of doubtful
use.
12. For discussion see Tuck (1979, p. 62).

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