This article was originally published by Roman Kireev at The Mises Institute. 

The regression theorem demonstrates, as a praxeological law, that money must originate as a marketable commodity before it can evolve into a widely accepted medium of exchange. Yet what is often missed is that this theorem—logically derived from the axiom of action—has broader implications for the genesis of all social institutions.

Just as money cannot be created by decree but must evolve through the voluntary and purposive actions of individuals, so too must law, property, language, and morality originate—not from design or force—but as the spontaneous and cumulative outcome of countless individual choices aimed at improving one’s own condition. Institutions lacking this foundation are not merely inefficient or unjust; they are illegitimate. Their existence depends not on the spontaneous order of human action, but on the sustained use of force.

This distinction is crucial, as it clarifies the moral and economic difference between property that arises through production and peaceful exchange, and property that originates in acts of violent expropriation.

One must be clear: this is not a matter of ideology, preference, or political opinion. It is a categorical principle—an a priori fact rooted in the logic of human action. If an institution arises from and operates through coercion—by taking without consent—its claim to property and legitimacy is not merely flawed; it is null. Intentions, rhetoric, and ideological slogans do not alter this reality. Whether the expropriator claims to help, protect, or uplift is irrelevant to the act of injustice.

At this point, one might well stop. Recognizing the regression theorem and its wide implications effectively renders all political debate within the statist framework irrelevant.

Yet statists insist—all property, they say, was at some point in history acquired by force and illegitimate means. Therefore, private property is just as, if not more, morally tainted than state property. From this, they leap to the claim that only the state can arbitrate “justice” by coercively managing and redistributing property. Otherwise, ownership will remain forever morally suspect. Some go even further, insisting that property itself—like human action—is merely a legal fiction, existing only because the state defines and enforces it through its exclusive violent monopoly.

But statist objections collapse upon closer examination. Even if some property originates unjustly, absent the state, it immediately enters a framework governed by voluntary exchange, where ownership is continually subject to contest through peaceful forces: contract, competition, inheritance, and, where necessary, self-defense.

Over time, these mechanisms dilute and correct past injustices. Even if someone manages to acquire property unjustly without facing resistance, he has no choice but to enter the peaceful order of voluntary exchange in order to retain it or benefit from it. The thief, once he steals successfully, cannot go on stealing successfully forever—he must integrate into voluntary exchange. He possesses no legal monopoly on violence, no permanent power to extract, and no enduring stroke of luck. Crucially, the thief depends on the framework of peaceful, voluntary exchange and private property to make use of what he has stolen. Without it, the goods he acquires lose their utility, and the act of theft becomes functionally meaningless. Moreover, by the very act of preparing for theft, the thief affirms the concept of private property—he recognizes its existence and legitimacy, even as he violates it.

State property, by contrast, is not a relic of past injustice—it is the ongoing expression of it. The state’s monopoly on violence, and its by-product—a defenseless population—ensures that its “ownership” is perpetually renewed through coercion. It is not merely the product of a historical crime; it is a crime in progress. A business or an individual with shady origins is fundamentally different from a state that continues to seize and redistribute with impunity.

If the statist critique of private property were consistent, it would not call for the preservation of the state—it would demand its immediate abolition. If historical and ongoing injustice is truly the concern, then rectification requires dismantling the institution that perpetuates it, not entrusting it with even more power. The only just path is the immediate abolition of the state and the full privatization of all state assets.

This means ending taxation and abolishing all forms of coercive authority over defense, policing, and law. Just as no individual can steal, kidnap, conscript, or murder another, no organization or institution can claim that right. Sovereignty resides with the individual alone, and all legitimate force must arise from voluntary contract or acts of self-defense.

Typical discourse presumes one can privatize within a system still dominated by the very institution that invalidates voluntary ownership. But any so-called “free market reform” under statism is doomed from the outset. The gun never leaves the room. Statist privatization is reversible, deregulation is temporary, and tax cuts vanish. The market, under the state’s thumb, is a hostage, not a liberated force.

True privatization begins with an uncompromising refusal to tolerate coercion in any form, and with the restoration of individual sovereignty first. Only when the individual is free and inviolable can one meaningfully speak of privatizing anything else.