What is it about private property that is so important? Why does it hold such a fundamental position in libertarian thought?
One could certainly argue from the philosophical perspective (John Locke and his ilk) that property derives from “self-ownership.” We own ourselves. We own our own labor. We own the things we create by our labor. And the things we own we can freely exchange with other men. In this sense, private property has an ethical charm, that it is created and exchanged peacefully.
Of course, saying something is peaceful, or even that it is ethical, is not the same as saying it increases prosperity. I like to couple the ethical argument for private property with an economic one, looking at the incentives at play.
Private property aligns the control over the use of a resource, with the benefits that accrue from the use of a resource.
If I own a cow, then I have control over how she is cared for, while also having rights to the milk she produces. This alignment of control and benefits give an incentive to use the cow well.
Without property rights, control and benefit are separated. The person who maintains the cow but has no rights to the milk would tend to underfeed her, while the one who had rights to the milk but did not have to maintain her would tend to overmilk her.
Private property aligns incentives by joining exclusive control and beneficial interest into the same person. This, I think, is the genius of private property, and the reason why alternatives fail.