Property rights systems as public goods
Remember when I was talking about property rights? About how much they vary in different societies, across space and time, though we tend to think of the ones we're used to as somehow "natural"?
Each property rights system defines what can and cannot be owned by whom, and what can and cannot be done with what is owned, and what responsibilities accrue to ownership. For example, humans are adjudged to own themselves in the United States currently, but cannot sell themselves. State by state US laws govern gun purchase, sale, ownership and modes of carriage, but in no state does gun ownership convey the right to shoot at people in general nor at the property of others. Land can be privately owned in the United States, but that does not include the right to exclude others from the airspace above the land, and typically not mneral rights to what lies beneath.
Whatever the property rights system, its well-understood and generally-observed existence is necessary to the functioning not only of trade and markets, but of property use.
A property rights system is a public good and the work to maintain it properly a public service, I now claim. In the next post I will talk about what private provision and maintenance of property rights claims entails.
--
I am arguing that a society's generally-understood and defended private property rights system is a public good. To make that argument, I need to show that a privately-provided or market-provided system of private property rights deliver an inferior level or amount of systemic service.
Imagine if you will the classic siblings-in-the-back-seat-of-the-car situation, with the kids shoving for space and grabbing for toys and books in the back seat with them. And suppose that the adult(s) in the front of the car just let them have at it.
There will be yelling and increasing misery. There may well be injury to children and damage to books and toys. There will certainly be a lot of directly unproductive activity -- costs of competition that yield no direct pleasure or use.
If one sibling can dominate the others, then there may be peace of a sort, with the other sibling(s) under the dominant one's rule. And if the dominant sibling is benevolent or wants to avoid revolution, the distribution they impose may be quite beneficial.*
The same, of course, holds for any property rights distribution imposed from the front seat.
Any property rights distribution that can be maintained at low cost economizes on pain and destruction and the diversion of resources from creation and fun. While quite likely each person would like to have right to more property, a socially-maintained property rights system greatly reduces the diversion of resources to Grab, and the destruction of resources through Grab.
It remains to be argued that a state provides such a property rights distribution better than, say, paid guards would.
--
So, I have argued that a generally-understood system of property rights-- what can be owned by whom and with what restrictions-- is a public good. Because in facilitating trade and security and the ability to plan ahead with some sense of available resources. Because no community member can be excluded from enjoying its benefits. Because one household's use and enjoyments of those benefits does not reduce the benefits available to other community households.
But when the population served by the system gets beyond the point where faith in a benevolent leader or social dis/approval will maintain it-- can't it be efficiently maintained by individual effort or professional services supplied on a market basis?
Well, not in any society I know of. If you have to spend individual resources to guard your property from being taken by others, you could have used those resources to invest in scissor factories or restaurants, to produce ploughs or poetry. Your protection of your own property costs you a lot (maybe your health, maybe your life), and does not benefit other household very much at all.
When a household hires guards to make its possession and exchange of goods, those guards are seldom given a mandate to provide service to anyone else.
Why not have a play-to-pay system, though? If you can't protect your own property rights, tough luck! Those with little wealth or income and unwilling to be their own enforcers and yet remain in the community will probably operate primarily by concealing their property. That reduces their enjoyment of it. That removes them from market participation.
And if you believe, as I do, that productive, talented, innovative people come from and live in every income/wealth class, that is a loss to the community.
Only a security apparatus hired by the community as a whole can efficiently provide maintenance of a property rights system-- though of course not all do so. And those participating as enforcement officers or as part of a justice system where there are infractions still need to be paid, to divert their time and effort from other productive and pleasurable activities. Law enforcement and judicial officers who work on a bounty system have a long, multinational, terrible history as extortionists.
I am talking about a generally accepted system of property rights as a public good, preventing many destructive attempts at seizure and facilitating both public peace and mutually beneficial trade.**
Yesterday I used a parable to suggest that lack of an agreed property rights system is nasty enough that one frequently emerges in small-community situations, under the administration of a benevolent-enough dictator.
Anthropologist Marvin Harris argued that this is how community and government tend to start to emerge. Purely on heiristic grounds, I've always found this a convincing idea.
In very small communities, general deference to the leader and the system, combined with some community tut-tutting, may be enough to maintain the local property rights system.
In larger-enough communities, though, violation of the system-- "theft" as defined within-system-- would probably become more prevalent. Enough violation and the system itself tends to break down.
And what would ever motivate moving to larger community that would imperil a property rights system?
Consider two communities that are close together and that have sufficiently different opportunity cost in production to motivate mutual gains from trade . Now suppose that they have very different property rights systems.
It may be very difficult for them to agree on swaps: what looks like justice to one may easily look like robbery to the other.
Or perhaps their systems differ only in saying that one community may rightfully seize things from the other.
As in yesterday's backseat example, the opportunity for gainful allocation of Stuff without an agreed property rights system for all parties can lead to injury and the destruction of property.
And thus communities expand beyond social dis/approval and respect for a leader.
--
* Are you thinking of Machiavelli's The Prince? It's relevant. Perhaps you're considering Hobbes's characterization of an unsocialized life as "solitary, poor, nasty, brutish, and short"? Yup.
** Yes, of course a property rights system can be extractive or systemically unjust. I don't think it's wise to rule out the whole idea on those grounds.
Facebook posts incorporated:
A refresher on the nature of private property rights
A metaphor for a system with no social property rights system
Why a community would ever grow beyond a property rights system that can be maintained by social dis/approval
Why a community-provided system of property rights maintenance is is better than private defense
Each property rights system defines what can and cannot be owned by whom, and what can and cannot be done with what is owned, and what responsibilities accrue to ownership. For example, humans are adjudged to own themselves in the United States currently, but cannot sell themselves. State by state US laws govern gun purchase, sale, ownership and modes of carriage, but in no state does gun ownership convey the right to shoot at people in general nor at the property of others. Land can be privately owned in the United States, but that does not include the right to exclude others from the airspace above the land, and typically not mneral rights to what lies beneath.
Whatever the property rights system, its well-understood and generally-observed existence is necessary to the functioning not only of trade and markets, but of property use.
A property rights system is a public good and the work to maintain it properly a public service, I now claim. In the next post I will talk about what private provision and maintenance of property rights claims entails.
--
I am arguing that a society's generally-understood and defended private property rights system is a public good. To make that argument, I need to show that a privately-provided or market-provided system of private property rights deliver an inferior level or amount of systemic service.
Imagine if you will the classic siblings-in-the-back-seat-of-the-car situation, with the kids shoving for space and grabbing for toys and books in the back seat with them. And suppose that the adult(s) in the front of the car just let them have at it.
There will be yelling and increasing misery. There may well be injury to children and damage to books and toys. There will certainly be a lot of directly unproductive activity -- costs of competition that yield no direct pleasure or use.
If one sibling can dominate the others, then there may be peace of a sort, with the other sibling(s) under the dominant one's rule. And if the dominant sibling is benevolent or wants to avoid revolution, the distribution they impose may be quite beneficial.*
The same, of course, holds for any property rights distribution imposed from the front seat.
Any property rights distribution that can be maintained at low cost economizes on pain and destruction and the diversion of resources from creation and fun. While quite likely each person would like to have right to more property, a socially-maintained property rights system greatly reduces the diversion of resources to Grab, and the destruction of resources through Grab.
It remains to be argued that a state provides such a property rights distribution better than, say, paid guards would.
--
So, I have argued that a generally-understood system of property rights-- what can be owned by whom and with what restrictions-- is a public good. Because in facilitating trade and security and the ability to plan ahead with some sense of available resources. Because no community member can be excluded from enjoying its benefits. Because one household's use and enjoyments of those benefits does not reduce the benefits available to other community households.
But when the population served by the system gets beyond the point where faith in a benevolent leader or social dis/approval will maintain it-- can't it be efficiently maintained by individual effort or professional services supplied on a market basis?
Well, not in any society I know of. If you have to spend individual resources to guard your property from being taken by others, you could have used those resources to invest in scissor factories or restaurants, to produce ploughs or poetry. Your protection of your own property costs you a lot (maybe your health, maybe your life), and does not benefit other household very much at all.
When a household hires guards to make its possession and exchange of goods, those guards are seldom given a mandate to provide service to anyone else.
Why not have a play-to-pay system, though? If you can't protect your own property rights, tough luck! Those with little wealth or income and unwilling to be their own enforcers and yet remain in the community will probably operate primarily by concealing their property. That reduces their enjoyment of it. That removes them from market participation.
And if you believe, as I do, that productive, talented, innovative people come from and live in every income/wealth class, that is a loss to the community.
Only a security apparatus hired by the community as a whole can efficiently provide maintenance of a property rights system-- though of course not all do so. And those participating as enforcement officers or as part of a justice system where there are infractions still need to be paid, to divert their time and effort from other productive and pleasurable activities. Law enforcement and judicial officers who work on a bounty system have a long, multinational, terrible history as extortionists.
I am talking about a generally accepted system of property rights as a public good, preventing many destructive attempts at seizure and facilitating both public peace and mutually beneficial trade.**
Yesterday I used a parable to suggest that lack of an agreed property rights system is nasty enough that one frequently emerges in small-community situations, under the administration of a benevolent-enough dictator.
Anthropologist Marvin Harris argued that this is how community and government tend to start to emerge. Purely on heiristic grounds, I've always found this a convincing idea.
In very small communities, general deference to the leader and the system, combined with some community tut-tutting, may be enough to maintain the local property rights system.
In larger-enough communities, though, violation of the system-- "theft" as defined within-system-- would probably become more prevalent. Enough violation and the system itself tends to break down.
And what would ever motivate moving to larger community that would imperil a property rights system?
Consider two communities that are close together and that have sufficiently different opportunity cost in production to motivate mutual gains from trade . Now suppose that they have very different property rights systems.
It may be very difficult for them to agree on swaps: what looks like justice to one may easily look like robbery to the other.
Or perhaps their systems differ only in saying that one community may rightfully seize things from the other.
As in yesterday's backseat example, the opportunity for gainful allocation of Stuff without an agreed property rights system for all parties can lead to injury and the destruction of property.
And thus communities expand beyond social dis/approval and respect for a leader.
--
* Are you thinking of Machiavelli's The Prince? It's relevant. Perhaps you're considering Hobbes's characterization of an unsocialized life as "solitary, poor, nasty, brutish, and short"? Yup.
** Yes, of course a property rights system can be extractive or systemically unjust. I don't think it's wise to rule out the whole idea on those grounds.
Facebook posts incorporated:
A refresher on the nature of private property rights
A metaphor for a system with no social property rights system
Why a community would ever grow beyond a property rights system that can be maintained by social dis/approval
Why a community-provided system of property rights maintenance is is better than private defense