Eric Falkenstein — The History of Individual Property Rights

Short summary. Worth read. Eric Falkenstein is a financial economist rather than a historian but he has done his research on this.

Falkenblog
The History of Individual Property Rights

Eric Falkenstein

David Sloan Wilson — How to Construct a New Invisible Hand: A Conversation with Peter Barnes

In a previous essay, I announced a new concept of the invisible hand to replace the old and erroneous idea that the pursuit of self-interest robustly benefits the common good. The new version is based on examples of the invisible hand that exist in nature, such as cells that benefit multi-cellular organisms and social insects that benefit their colonies. These lower-level units don’t have the welfare of the higher-level units in mind. They don’t even have minds in the human sense of the word. Instead, they exhibit behaviors that have been winnowed by higher-level selection to benefit the common good. Higher-level selection is the invisible hand.

Absorbing this fact leads to a robust conclusion about the design of our own societies. We must learn to function in two capacities: 1) As designers of social and economic systems; and 2) as participants in the systems that we design. As participants, we need not have the welfare of the whole system in mind, in classic invisible hand fashion. But as design­ers, we must. The invisible hand must be constructed, which would be a contra­diction of terms according to the old concept.

Yet, this does not mean that the invisible hand must be constructed by centralized plan­ning, the main alternative to laissez faire economic policies that is typically imagined. Instead, the design process needs to be evolutionary, iterative, and collaborative, resulting in mechanisms that work like the invisible hand, even though they never could have arisen on their own. This constitutes a middle path between laissez faire and centralized planning that could be a breakthrough in solving the problems of our age....

Evonomics
How to Construct a New Invisible Hand: A Conversation with Peter Barnes
David Sloan Wilson | SUNY Distinguished Professor of Biology and Anthropology at Binghamton University and Arne Næss Chair in Global Justice and the Environment at the University of Oslo

Diane Coyle — Property is – theft?

Buying versus renting. Is buying over in the drive for rent-seeking?

The Enlightened Economist

Property is – theft?
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Diane Coyle — Coase in theory and Coase in practice

Diane Coyle reviews Forever Contemporary - The Economics of Ronald Coase, edited by Cento Veljanovksi.

It starts with the Coase theorem: that when property rights are clearly assigned and there are no transactions costs (such as those involved in acquiring information, negotiating, monitoring compliance etc), then there are no externalities leading to a divergence between private and social costs: the parties involved will negotiate their way to the efficient outcome. ‘Externalities’ are symmetric, he argued: if you claim a right to clean air, you are costing me the opportunity to pollute. Who compensates whom will depend how the property rights are assigned. If you indeed have your clean air right, I will have to bargain with you to pay you for the pollution; if I have the right to produce emissions, you will have to pay me to desist.

Coase made it clear he took the existence of transaction costs very seriously, and argued that every situation had to be carefully assessed to determine the most welfare-enhancing course of action.…

Download free PDF.

The useful bibliography of Coase’s work shows how seriously he took his own conclusion that you have to look in detail at each industry, its history and specificities before pontificating; as is well known, he described anything else as ‘blackboard economics’...

Case method instead of formal theory.

The Enlightened Economist
Coase in theory and Coase in practice
Diane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

David Ellerman — PBS Making Sen$e blog: The case for employee-owned companies

I was asked by Paul Solman, the PBS National Economics Correspondent, to write down in non-technical terms the basic argument for the labor theory of property, i.e., the ordinary juridical responsibility principle applied to property rights and liabilities. This is the “justice in production” argument in a nutshell. You can go directly to the PBS Making Sen$e site, or

Click here to download a PDF of the blog entry.

Quite interesting that Paul Solman would make this request of David Ellerman, especially when PBS is going over the cliff in other respects.

This is short.

David Ellerman
PBS Making Sen$e blog: The case for employee-owned companies
David Ellerman | University of California, San Diego, Political Science, Fellow, Center on Global Justice, University of California, Riverside, Philosophy, Visiting Scholar

Eric Schliesser — On The Right to Work in Adam Smith and The Origin Of the Harm Principle

Quotes from J. S. Mill and Adam Smith.

Digressions&Impressions
On The Right to Work in Adam Smith and The Origin Of the Harm Principle
Eric Schliesser | Professor of Political Science, University of Amsterdam’s (UvA) Faculty of Social and Behavioural Sciences

Josh Israel — TransCanada Is Seizing People’s Land To Build Keystone, But Conservatives Have Been Dead Silent

“If this were a wind mill project or a solar project, Republicans would have been hair-on-fire crazy supporting the property rights of farmers and ranchers,” she observed. “But because it’s an oil pipeline, it’s fine."

Property rights are sacred except when they aren't.

Think Progress
TransCanada Is Seizing People’s Land To Build Keystone, But Conservatives Have Been Dead Silent
Josh Israel

Randy Wray — Join the Protest Against Hometheft

Randy hits another home run. Here are some high points.

It is not an overstatement to say that the Global Financial Crisis would not have happened without MERS. MERS was absolutely essential to the “efficient” securitization model that led up to the crisis.

It is all illegal. There was never any law that permitted the industry to create MERS to evade US property law (and to avoid paying recording fees in local jurisdictions).
Many brave homeowners have fought against the banksters, taking their cases to court.

The banks have lost some cases, but have also won some. So, predictably, our lawmakers and other policymakers are moving to legalize home theivery. Make it all completely above-board. Create a national electronic registry along the model created by MERS. The intention is to destroy property law and to undermine local property records that protect American homeowners. It is led, of course, by the banksters, but also–I guess not surprisingly–by the Fed.

You see, the Fed does not like local proptery law. It acts like sand in the securitization-foreclosure cogwheels created by the banksters. They want the cheapest, quickest way to turn your home into a money-making machine. Making money for them, that is. They do not want local yokels slowing that down by actually trying to protect the interests of local homeowners. What, you want accurate property records? You want to know who owns your mortgage? You want to know when a bank sells your mortgage to some foreign bank? You want to be able to track down who you are supposed to make payments to, and whether they actually received them? No, the Fed and the Bankers do not think you have a right to this sort of information. They’ll keep it for you in a national electronic registry. No more going down to your local recording office to find out.

In truth, you cannot do that any more. MERS and the banksters already destroyed the chain of title. The Fed wants to rubberstamp what the industry already did.

Economonitor — Great Leap Forward
Join the Protest Against Hometheft
L. Randall Wray | Professor of Economics, University of Missouri at Kansas City
Market "efficiency" at work.

The Fed wants to keep securitization cheap–indeed, the Fed is quite open about that. It wants to reboot 2004 all over again. It wants to bring back the subprime bubble. Steamrolling a new–legal this time–MERS is part of the plan to boost another real estate bubble. It was so much fun last time around! And there are still some Americans among the 99% who still own their homes. The banks need to mortgage those so they can foreclose and move the rest of the real estate to the top 1%.

In an environment of low rates, the best way to get a safe return is to buy up foreclosed houses on the cheap, rent them at a risk-weighted rate of return higher than otherwise available in the market, and then flip them for a tidy gain in the next engineered bubble.

See also:

New Economic Perspectives
Survey of Bankers Unintentionally Documents their Depravity
William K. Black | Associate Professor of Economics and Law, UMKC

Matt Bruenig — Anti-liberty economic regulations: a dialogue

More libertarian fun.

Anti-liberty economic regulations: a dialogue 
Matt Bruenig

Barkley Rosser — More On Owning Unowned Land

Economics, law, and the origin of property rights.

Merrill cites John Locke on this who wrote, amazingly enough, that we should think of the world as originally "being America," that is a giant commons. For Locke it was mixing one's labor with the land that established ownership, a labor theory of ownership as it were. The matter of "accession" is posed as an alternative, but this simply involves a modification of this labor mixing principle, altering it to the first owner is the one who establishes effective control over the land. Once that is recognized, then a chain is established that simply continues, which is why we have this matter of the code holding when land first becomes clearly owned being the relevant one for later property transfers, particularly real estate ones.

Now in fact this does not really answer our question, although it does highlight important details to some extent, particularly when we consider Locke's view of "America." Why is it that the Indians did not "own" the land, or were not considered to be the owners by the British (and Spanish and French)? Needless to say, certain areas were used regularly by certain tribes, arguably enough that Locke should have granted them property rights, unless he wanted to argue that they could not due to being subhuman or something like that (am not aware of Locke ever making such arguments).

No, obviously what is involved is recognizing that behind property rights, certainly in land, there is assumed to be some sort of government or state with an organized legal code and system of courts to enforce it, even if it is one that has evolved "spontaneously" a la the common law of Britain, in contrast to the continental codes derived from Roman law, although the argument of Shleifer and his allies about the differences between these has been way overblown and often full of errors, the famous "Legal Origins" QJE paper by Glaeser and him being notorious for its myriad mistakes, even as it is one of the most heavily cited economics papers of all time.

So, private property comes into play when a government with a legal system recognizes that somebody has "mixed their labor" or otherwise assumed some recognized degree of control over some land with, very importantly, that person recognized as someone with legal rights to do so within the law code of the state involved, with that state itself ultimately having some degree of control or claim to control the land in question.

Econospeak

More On Owning Unowned Land

J. Barkley Rosser | Professor of Economics at James Madison University in Harrisonburg, Virginia

J. Barkley Rosser — Who Owns Unowned Land?

Why Cliven Bundy doesn't have a legal leg to stand on. Also a interesting look at property rights.

Econospeak
Who Owns Unowned Land?

J. Barkley Rosser | Professor of Economics at James Madison University in Harrisonburg, Virginia

Frances Coppola and Daniel P. Ellsberg on Property Rights

People of libertarian persuasion are often very keen on the idea that Government should "defend property rights". Their view is that the assets they own are theirs by natural right, and it is the Government's job to defend that right....

But Government doesn't "defend" property rights, anyway. It creates them. The natural law is "I'm bigger and stronger than you are, so I'm having that". Government, pressured by people who believe that things they have are theirs by right even if they can't defend them, creates laws that say that what you have, you own, and no-one else can have it however big and strong they are. And it creates the legal infrastructure to enable those laws to be enforced. Well, more or less. Too often those laws are not enforceable in practice, not just because people don't have enough money to enforce them, but because it isn't easy to define what we mean by "ownership" or "property".

The legal infrastructure created by Government to protect individual "rights" incorporates within itself the right for Government to take some of the property of its citizens in order to fund itself. But our libertarian friends are horrified by the idea of taxes, especially capital taxes. Government taking your property from you by force is a betrayal of what they regard as the primary function of Government, namely to "defend property rights". This is illogical. Without taxes, Government could not function and the laws created by Government could not be enforced - including the "property rights" beloved of libertarians. Confiscation of property by Government is necessary if it is to "defend" the right to own property.

I find this view bizarre. As I've noted before, there are no "natural" property rights. The law of the jungle, which is the law that holds when all other laws are unenforceable, says that the only property you "own" is what you can defend....

What our libertarian friends really want is for Government to "defend" the property rights that they would LIKE to have - namely that what they have, they own, and no-one - not even Government - can take it from them. I don't have any problem at all with the idea of Government defining and enforcing an alternative set of property rights that are more "just" than the law of the jungle, if that can be done. But to claim that these are "natural" property rights and Government is merely "defending" them is simply wrong. If property laws are more "just" than the law of the jungle, it is ONLY because Government makes them so. And if Government can impose "just" laws regarding property ownership, why should it not impose "just" laws in other areas too? The problem is, of course, that the "just" property rights beloved of the libertarian right conflict with other "just" laws, such as the right of workers to a living wage, and the right of those who cannot work to the means to live. But why should laws that primarily benefit the rich override laws that primarily benefit the poor?

Coppola Comment
A question of justice
Frances Coppola


Daniel Ellerman has a book entitled Property and Contract in Economics: The Case For Economic Democracy. It is a free download here.

This book presents a modern version of the old Labor (or Natural Rights) Theory of Property and of an Inalienable Rights Theory that descends from the Reformation and Enlightenment. Together these theories re-solve the basic problem of distribution in the sense of giving a basis for the just appropriation of property and a basis for answering the question of who is to be the firm, e.g., the suppliers of share capital as in conventional capital, the government as in socialism, or the people who work in the firm as in the system of economic democracy (or labor-managed market economies). While these theories address old questions in economics, they do so in an entirely different manner than conventional economics which renders the questions as being about value or price theory (instead of about property rights and contracts). This book is now out of print and the rights have reverted to the author.

See also Daniel Ellerman's paper, Rethinking Common vs. Private Property

The purpose of this paper is to suggest a rethinking of the common-versus-private framing of the property rights issue in the Commons Movement. The underlying normative principle we will use is simply the basic juridical principle that people should be legally responsible for the (positive and negative) results of their actions, i.e., that legal or de jure responsibility should be imputed in accordance with de facto responsibility. In the context of property rights, the responsibility principle is the old idea that property should be founded on people getting the (positive or negative) fruits of their labor, which is variously called the labor or natural rights theory of property[Schlatter 1951].[1]

For instance, the responsibility principle is behind the Green Movement’s criticism of the massive pollution and spoliation by corporations that don’t bear the costs or legal responsibility for their activities. Ordinary economics shows that markets do not function efficiently in the presence of these “negative externalities” but the responsibility principle shows that there is injustice (i.e., the misimputation of responsibility) involved as well, not just inefficiency, and that aspect is overlooked by conventional economics.

The current economic system institutionalizes forms of social irresponsibility that go far beyond the topic of negative externalities. Indeed, the forms of socialized irresponsibility embodied in Wall Street capitalism are behind the current economic crisis, although the roots are much older. In recent decades, the American model of Wall Street capitalism has been promoted as an “advanced” model of a market economy to be emulated not only in the industrialized countries but also in the post-socialist and developing worlds. Hence the current crisis provides the opportunity to finally discredit the idea that this “advanced” form of socialized irresponsibility should be emulated by anyone. That is the topic of the next section.

But our main point goes much deeper than just a tamed or reformed version of capitalism; it goes to the form of private property behind the system. The ideology of the current system seems to have convinced those on both the Left and Right that the current system is based on the principles of private property so that anyone who opposes the current system is an “enemy of private property” itself, as the Commons and Green Movements are often portrayed (and as some members of those movements may portray themselves). We will see that practically the opposite is true.

Like the old system of chattel slavery, the current property system is “a” private property system but it is grounded on violating the very responsibility principle upon which property appropriation and other juridical imputations are supposed to rest. And when private property is refounded on the responsibility principle (or the labor theory of property) then a very different system emerges where firms are worker cooperatives (or similar workplace democracies) where people will appropriate the positive and negative fruits of their labor. Moreover this refounding of property on the responsibility principle provides no basis to treat the products of nature as if they were ordinary private property.

The rethinking of private property will take place in two steps: (1) the undoing the “brain-washing” ideology that the usual form of enterprise is based on “private ownership of the means of production” and (2) the application of the responsibility principle to the human activities of the people working in any enterprise where they are inalienablyde facto responsible for both the positive and negative results of their activities. After two sections on those two steps and a section on the notion of inalienability, we show how the corporation can be re-constituted from these first principles. Then we conclude with the negative application of the labor theory of property to the products of nature (natural resources) where some common ownership arrangement is required (rather than ordinary private ownership) so that the equal claims of future generations can be respected.

David Sirota — Big Oil Loses It: ExxonMobil Claims it Owns the Letter “X”!

Apparently if you are the world’s richest oil company used to making $104 million in profit every day, no lawsuit is too frivolous, expensive or downright hilarious when you are the plaintiff. That’s the message from ExxonMobil this week as it filed a lawsuit against the FX television network. In court papers, the oil behemoth effectively argues that it owns the exclusive right to put two X’s next to each other....

Many of the aforementioned suits — including ExxonMobil’s — seem more than a bit absurd. Then again, the Supreme Court just ratified the right of companies to claim patent protections for DNA. So in the brave new world of intellectual property, “absurd” is apparently in the eye of the beholder.

AlterNet
Big Oil Loses It: ExxonMobil Claims it Owns the Letter “X”!
David Sirota | Salon

I recall a similar case, IIRC also involving Exxon, in which a highly successful but small in comparison company was sued on a similar pretext and just a absurd. The company folded owing to the cost of the lawsuit.

Mike Konczal — How Ronald Coase Demolished Current Libertarian Ideas About Property

Property isn’t a vertical relationship between a person and an object, but instead is a horizontal, reciprocal relationship of exclusions between people. Since the benefit of one person in regard to property comes at the expense of someone else, there’s no logical or coherent way to invoke liberty or classical liberal principles of “do no harm” when it comes to how the law determines the shape of property. All we can do is pick among competing systems that try to achieve shared social goals.

That’s not an idea normally associated with the economist Ronald Coase, who died yesterday at 102. But it’s a very important part of his landmark paper, ”The Problem of Social Cost” (1960), that goes missing when the right-wing celebrates his legacy. Let’s unpack it.

Next New Deal | Rortybomb
How Ronald Coase Demolished Current Libertarian Ideas About Property
Mike Konczal

Konczal bases much of his post on the Coase Theorem, which was a product of George Stigler, based on the work of Coase. Coase, however, rejected it as his. "Coase himself has stated that the theorem was based on perhaps four pages of his 1960 paper The Problem of Social Cost and that the "Coase theorem" is not about his work at all." (source)

I have always wondered how Libertarian Austrian economics could think that the system of enforceable property rights that Rothbard proposes could possibly work given transaction costs involved in litigating disputes over externalities. It would be litigation nation, and a lot of the judicial decisions would be based on the way judges approached issues. How lawmakers and judges would be selected would be extremely important since where there is power there is politics and class structure.

Yves Smith — Questioning the Underlying Structures of Property and Power is “Off the Table”

Cuts to the chase. Economics is fundamentally about power. Discussion of power, like money, is off-limits in conventional economics.

Money and power are the essence of capitalism, and conventional economics is a myth rationalizing "primitive accumulation" of private property aka expropriation and exploitation.

Naked Capitalism

Questioning the Underlying Structures of Property and Power is “Off the Table”
Yves Smith

Ben Jealous and Philip Radford —How Shell is trying to send a chill through activist groups across the country

This summer, the 9th Circuit Court in California is weighing the question of whether companies have the right to take preemptive legal action against peaceful protesters for hypothetical future protests. This will be an extraordinary decision that could have a significant impact on every American’s First Amendment rights.

The case, Shell Offshore Inc. vs. Greenpeace, was filed by Shell Oil Company. Last summer, Shell assumed –based on conjecture — that Greenpeace USA would protest the company’s drilling in the Alaskan Arctic.  Shell asked the 9th Circuit court for a preemptive injunction and restraining order against Greenpeace USA [Full disclosure: Philip Radford is the executive director of Greenpeace USA].

Despite Greenpeace’s appeal, the court granted the injunction for the entire duration of the drilling period, a decision which effectively gave a federal blessing to the company’s wish to do its controversial work in secret.

Greenpeace has asked the court for a full review, and this summer, the court will decide the ultimate fate of the case.If the court rules in Shell’s favor, it would have a profound chilling effect on First Amendment rights across the country. Nothing would stop other corporations from taking similar preemptive legal action against anyone they deem to be likely protesters. That could be an environmental group, it could be a civil rights group, or it could be a Tea Party group — or anyone in between.

Grist
How Shell is trying to send a chill through activist groups across the country
Ben Jealous, CEO of the NAACP, and Philip Radford, executive director of Greenpeace USA

Taste of life in a Libertarian utopia where property rights are recognized but not human rights and civil rights.

Citizens United recognized that money talks and so corporations have the right to free expression by through legalized bribery. Social protest? Not so much.

Pretty twisted meaning of "liberty." Sociopathic?

Izabella Kaminska quotes R. Buckminster (Bucky) Fuller

Izabella Kaminska posted two Bucky Fuller quotes at Toward A Leisure Society today that are relevant to economics and politics :


BUCKY ON PROPERTY RIGHTS

Buckminster Fuller on the GRUNGE

Timothy Taylor — Is "Intellectual Property" a Misnomer?

If "intellectual property" is not a misnomer, then it needs to be explained on what basis a property right is time-delimited, as are copyrights and patents but not other forms of property. Is this a property right or a subsidy granted by law, e.g., to foster innovation and creativity?

Conservable Economist
Is "Intellectual Property" a Misnomer?
Timothy Taylor

Daniel Little — Ostrom's central idea

Essentially her research comes down to this point: There are multiple possible property systems through which access to natural resources can be mediated. A simple Lockean theory of private property holds that all goods have individual private owners. It is possible, however, to conceive of forms of “social property” or community property through which at least some assets are held in common, and for which there are fair and well-defined procedures for providing rights of access to the use and enjoyment of the social property. As Ostrom demonstrated in depth, there are socially feasible arrangements in which a “common property resource” such as a fish stock is exploited by a number of independent producers within the context of a stable community. In this instance we have a combination of private property (nets and boats) and social property (the waterway and fish stock), and Ostrom documents several different sets of social rules that establish the terms of access and use that individuals will have to the common property resource.

Read it at Understanding Society
Ostrom's central idea
by Daniel Little