Barbed Wire: A Revolution in Property Rights

Barbed wire played a central role in the development of the Wild West. The “Devil’s Rope” transformed the plains from an expansive open range into a set of defined and enforced tracts of cattle land and farm ground, buttressing property rights and facilitating a boom in economic productivity. The invention of barbed wire also resulted in litigation that set a clear standard in American patent law, creating a system of predictable results that facilitated prospective innovation.

The West without Wire

Writers have often romanticized the nineteenth century American west as a place of freedom on the open range where cattlemen enjoyed the ability to drive their livestock over the vast plains. Such a characterization, however, overlooks the plight of the farmers. Despite their fertile farm soil, many of the Plains states comprised an “open range,” where ranchers’ stock could roam freely.¹ At that time, the law assigned responsibility to the farmer for the protection of his crops from cattle. Unless the farmer had erected a fence around his property, the law barred him from receiving damages in the event that cows trampled his fields.² This legal arrangement made fencing a chief priority for the farmer. Indeed, “annual fencing repair costs [in 1872] were greater than combined annual tax receipts at all levels of government.”³ While the open range may have afforded freedom for the rancher, it decimated the agricultural industry.

The burden of liability spelled disaster for any farmer who could not afford a fence. Prohibitively expensive fencing in the Great Plains diminished farmers’ ability to adequately secure their property.⁴ The western landscape lacked the dense forestry of the east, making wood – a prime fence-building material – a rare commodity.⁵ Geology also ruled out the stone-wall fencing used in parts of the east.⁶ Smooth iron fencing proved untenable because the wire was easily penetrable by cattle.⁷ In areas without cheap lumber, the marginal cost of excluding cattle from a parcel often exceeded the marginal benefit of the reduction in damage.

Despite legal ownership of their property, farmers lacked the ability to define and enforce their rights. “Farmers had secure title to land, but had to pay high fencing costs to receive protection from damage by others’ livestock.”⁸ The government nominally protected the farmer’s property, but was impotent to enforce the right to exclude. Some jurisdictions experimented with “herd laws” – rules that shifted liability to the rancher for damage inflicted by his cattle.⁹ Such laws required stockmen to fence in their cattle instead of forcing farmers to fence them out. However, the herd laws enjoyed only limited success due to the entrenched social norms and the difficulty of implementing damages.¹⁰ “In the absence of physical barriers... formal laws appear to have provided farmers little refuge from roaming livestock.”¹¹ Farmers’ inability to enjoy their full bundle of property rights rendered valuable agricultural land underproductive, resulting in economic inefficiency.

Barbed Wire’s Invention

The story of barbed wire began in 1873 in rural northern Illinois. DeKalb County, situated about 60 miles west of Chicago, was holding its county fair. One exhibitor at the fair had built a wood rail with metallic spikes.¹² The exhibit sparked a frenzy of innovation to solve the fencing problem. The intriguing device set some enterprising local men to thinking: Jacob Haish, a lumberman, Isaac Ellwood, a hardware merchant and mechanical engineer, and Joseph Glidden, a farmer.¹³ The three soon devised the barbed wire fence, with each man putting a unique twist on the invention. On November 24, 1874, the U.S. Patent Office awarded Joseph Glidden a patent for an “Improvement in Wire-Fences.”¹⁴

After receiving his patent, Glidden partnered with Ellwood to produce enormous amounts of the product in their DeKalb factory.¹⁵ Glidden’s design far outcompeted his rivals. Not only was his product easy to manufacture, but it effectively kept cattle from getting through and resisted damage from temperature fluctuations.¹⁶ Ranchers and farmers displayed an initial skepticism of the product. Few believed it could serve as an effective barrier for cattle. Much of the commercial success of barbed wire is attributable to John W. “Bet-A-Million” Gates, a young salesman hired by Ellwood.¹⁷ Ever the tenacious salesman, Gates determined to silence the critics. He traveled to San Antonio, Texas and fenced in an area with barbed wire at the Military Plaza. Gates put the meanest Longhorn cattle in the corral and invited spectators to provoke the animals.¹⁸ When the fence successfully contained the cattle, barbed wire spread like wildfire and sales skyrocketed. Barbed wire production soared from 10,000 pounds in 1874 to 80,500,000 pounds in 1880.¹⁹ During the last 25 years of the nineteenth century, barbed wire enclosed the American west and ended the era of the open range.

HOT-DIP GALVANIZED FLAT WRAP RAZOR WIRE (RING TYPE)

The Economic Impact of Barbed Wire

In 2010, Richard Hornbeck published the seminal work on the economic impact of barbed wire in The Quarterly Journal of Economics. Hornbeck conducted an empirical study of the changes in land values, settlement, and crop production resulting from the diffusion of barbed wire. The study examines the period from 1880-1900, when barbed wire had a differential impact on low versus high woodland counties.²⁰ Hornbeck explains that any relative gains of less-wooded counties due to barbed wire would have disappeared after 1900 because the new technology had entirely replaced wood fencing after that point.²¹ The study, which focuses on the eastern plains, categorizes counties based on the amount of forestation: low, medium, and high woodland.²² In 1880, before barbed wire had become widespread, the high cost of lumber in lower woodland areas meant that those counties had less fencing as compared with their more densely forested counterparts.²³ Economically, the disproportionately high fencing prices rendered it costlier for farmers to exclude unwanted intruders – in this case cattle – from their agricultural property. The marginal cost of protection via enclosure exceeded the marginal benefits of undamaged crops for farmers in treeless areas.

Hornbeck theorizes that farmers maximize profits by choosing an optimal level of investment and protection.²⁴ He predicts that “If investment increases when the marginal cost of protection falls, this implies that greater protection directly increases investment[.] If protection directly encourages investment, then investment should increase during this time period and especially in timber-scarce areas.”²⁵ Based on the results of the study, the low woodland counties experienced relative²⁶ gains in improvement intensity of land as compared with higher wooded counties during the period from 1880 to 1900. As compared to counties with 6% woodland, improvement intensity in counties with no woodland increased by a “statistically significant and substantial” 19% during that 20-year span. ²⁷ Importantly, these relative gains were not present before the introduction of barbed wire and disappeared after it became ubiquitous.²⁸

In addition to gains in land improvement, Hornbeck’s study indicates relative gains in crop productivity in lower woodland counties. “From 1880-1890, average productivity across all six crops increased 23.4% more in a county with 0% woodland than in a county with 6% woodland. ²⁹ In keeping with this development, less-wooded counties began to increase the fraction of their land devoted to crop production.³⁰ Crop choice serves as another key indicator of barbed wire’s impact on farming. Whereas hay is less susceptible to damage from livestock, other crops, such as corn, wheat, oats, barley, and rye are much more vulnerable. The study demonstrates that farmers tended to devote increasing amounts of their land to riskier crops from 1880 to 1890 as barbed wire usage spread.³¹ Because it is not affected by weather and other short-term shocks, crop choice is perhaps an even better indicator of barbed wire’s impact than the changes in crop production.³²

Impacts on the value of land present the most compelling evidence for the economic effects of barbed wire. “Changes in land values potentially capitalize the total value of barbed wire to farmers.”³³ Indeed, Hornbeck’s analysis finds a significant relative increase in land values in low-woodland areas as compared with higher woodland regions from 1880-1890. Using the impact on land values to approximate the total benefit to farmers, Hornbeck estimates that farmers were $103 million better off.³⁴ This figure equates to about 0.9% of United States GDP in 1880, although it potentially underestimates the total if barbed wire also benefited counties with more than 6% woodland and non-sample areas.³⁵

Hornbeck concludes that the introduction and diffusion of barbed wire technology significantly bolstered the economic development of the American west because it reduced farmers’ costs to enclosing their property. The “institutional failure was resolved not by legal reform but by technological change: the introduction of barbed wire fencing.”³⁶ Because the new wire lowered the marginal cost of exclusion, it enabled farmers in sparsely wooded areas to enjoy their full bundle of property rights. The increased security of property rights caused an explosion in economic growth. The substantial land improvements, rise in crop productivity, growth in livestock-susceptible crop varieties, and increase in land values evince the economic benefits of barbed wire. Hornbeck suggests that this example should serve as a lesson to developing countries: secure property rights may enhance economic development.³⁷

Barbed Wire’s Mark on Illinois Law

1874 marked a watershed year in the Land of Lincoln. Not only was barbed wire invented, but the State radically shifted the assignment of liability for damages from crop owners to keepers of livestock. Whereas the common law rule required owners of cattle to restrain their stock, Illinois, like most other states, had not theretofore applied such a rule. In delivering the Illinois Supreme Court’s 2019 ruling in Raab v. Frank,³⁸ Justice Garman summarizes this legal evolution. The Raab opinion references the 1848 case of Seeley v. Peters,³⁹ in which the Court announced that “[h]owever well adapted the rule of common law may be to a densely populated country like England, it is surely ill-adapted to a new country like ours;” “it does not, and never has prevailed in Illinois.”

The 1874 Animals Running Act⁴⁰ changed Illinois’ liability paradigm, implementing a common law-type rule. The act required livestock owners to contain their animals, holding them liable for any damages under a negligence standard. Was it mere coincidence that Illinois adopted this law the same year Glidden invented barbed wire? While the invention was almost certainly not a cause of the legislation – nor vice versa, the two developments quite possibly arose due to the same economic forces of the era. Illinois’ agriculture had developed significantly in the 25 years since Seeley. Friction between cattle owners and crop growers would have increased as more of the prairie became devoted to farming.

The increased frequency of contact between the roaming cattle and vulnerable crops made the invention of barbed wire economically valuable. It may have been a keen perception of this development that incentivized Glidden, Haish, and Ellwood to capitalize on this opportunity to create something of value. Likewise, the development of the law reflected the growing cattle-crop tension. As illustrated in the case of the “herd laws,” a simple shift of liability would likely have amounted to an ineffectual formality were it not for the concomitant invention of barbed wire. The technology, which developed in response to the same demographic and agricultural phenomena as the law, bolstered the enforceability of the new legal arrangement.

The Impact of Barbed Wire on Patent Law

The invention of barbed wire had significant impacts on United States patent law. By the time Glidden’s patent for an “Improvement in Wire-Fences” was issued in November, 1874, his fellow county fair-goers, Ellwood and Haish, had patented their own variations of barbed wire.⁴¹ Soon, hundreds of patents were awarded for various barbed wire designs.⁴² Glidden’s design rapidly emerged as the commercial leader, vastly outselling the competitors. His variation proved to be a unique “means for preventing cattle from breaking through wire fences” because it consisted of two wires that easily held the barbs in place.⁴³ Glidden sold half of his interest in the patent to Ellwood.⁴⁴ A couple years after the patent was issued, Washburn and Moen Manufacturing Company bought the rest of Glidden’s share and partnered with Isaac Ellwood in the prosperous barbed wire business.⁴⁵

Washburn and Moen soon faced a monumental legal battle as competitors challenged Glidden’s patent. The principle suit, filed in 1885, pitted Washburn against the Beat ‘Em All Barbed Wire Company.⁴⁶ After years of costly litigation, the Supreme Court decided in favor of the Washburn Company – the owner of the Glidden patent – in 1892.⁴⁷ The ruling concluded “It was Glidden, beyond question, who first published this device; put it upon record; made use of it for a practical purpose; and gave it to the public, by which it was eagerly seized upon, and spread until there is scarcely a cattle-raising district in the world in which it is not extensively employed.”⁴⁸

In “The Barbed Wire Invention: An External Factor Affecting American Legal Development,” Kevin Casey explains that the Supreme Court ruling in the Washburn case helped to establish guiding principles for modern patent law.⁴⁹ United States patent law was in disarray following the Civil War; the legal doctrine was “unsettled” when Glidden applied for his patent.⁵⁰ The Washburn case clarified the definition of a patentable invention. The Supreme Court “laid down a general rule... that if a new combination and arrangement of known elements produce a new and beneficial result never attained before, it is evidence of invention.”⁵¹ Furthermore, the Court ruled that the simplicity of an invention does not preclude a patent.⁵² These legal standards remain relevant today. The ruling also set a precedent by allowing Glidden’s commercial success to be considered as evidence for patentability.⁵³ By establishing clear legal standards in patent law, the Supreme Court’s decision in the barbed wire case helped create a system with predictable results.

The story of barbed wire illustrates the importance of property rights in economic development. The verdict is clear: the economic value of agricultural land vastly increased when barbed wire was adopted. The decreased marginal cost of protection enabled farmers to enjoy their property right to exclude. Freed from the burden of livestock encroachment, farmers greatly increased their production of valuable crop commodities. The resultant rise in land prices encapsulates the increased value of production that was facilitated by the newly-secured property rights.

In the case of barbed wire, the government proved impotent to protect the property rights of farmers. The state’s failure created a market demand for a remedy to the problem, incentivizing entrepreneurs like Glidden to innovate. Indeed, the advent of the market solution – barbed wire – rendered obsolete the government’s meager attempts at property right protection.⁵⁴ This historical development affords a valuable lesson for promoting economic growth. By facilitating an environment that encourages innovation and entrepreneurship, free market institutions create incentives for individuals to further improve market efficiency. Thus, the role of the state should be limited to fostering economic liberty and the protection of property.

By properly protecting intellectual property, the state can increase economic efficiency by promoting innovation. The invention of barbed wire spurred developments in patent law that illustrate the importance of predictable results in the legal system. Without clear standards for patentability, the government issued hundreds of patents for nearly identical devices. This resulted in confusion and costly litigation. By more clearly defining the doctrine of patent law in its 1892 Washburn decision, the Supreme Court set important precedents that improved economic efficiency. Precise standards and predictable results foster increased innovation because they reduce the inventor’s uncertainty that his intellectual property will be protected. Barbed wire, therefore, revolutionized economic efficiency by enhancing the property rights of inventors and farmers alike.