Purely “real” or nonfinancial assets have no such offsetting claims on other balance sheets. In theory, they represent direct claims on real goods.
That seemingly simple distinction, though, is far from simple when you start exploring it carefully.
To that end, consider the fundamental nature of “claims,” hence the nature and import of “ownership” and “property rights.” Full credit here to Matt Bruenig, who delivered the Aha! understandings for me on these topics — clear and (mutually) coherent definitions and explanations for concepts I’d been worrying at for years.
Mostly simply, ownership is an exclusionary legal claim. Ownership says you may have a picnic on your front lawn — which seems inclusionary, but that’s only meaningful because you may exclude anyone else from doing so. And you may invoke violence (farmed out to the police) to enforce that right of exclusion. As Matt has said so well, a modern ownership claim is best viewed as a violence voucher issued by government.
This imparts a decidedly sinister aspect to the lefthand side of balance sheets — a tally sheet of violence vouchers?…
So now to return, with that understanding, to the notion of real vs financial assets. In large, in aggregate, in the big national or global picture, both types of assets ultimately constitute claims on real goods. Someone holding zero real/nonfinancial assets but significant financial assets can make an immediate and successful claim on a new Maserati — a very “real” good. Everyone else is excluded from claiming that Maserati.
If this exclusionary notion is safe, in a very real sense your “real,” “nonfinancial” asset claim is actually offset by a liability — on the (EverybodyElseIn)TheWorld balance sheet. Call the entry “Stuff that we’re excluded from touching.” If all those exclusionary claims wall off AllTheGoodStuff with violence, we’re talking a very real liability indeed — even though this imaginary World Balance Sheet doesn’t, and practically probably can’t, exist.
This notional balance sheet may seem crazy and outlandish to us. But our ownership, property-rights, and “asset” structures do and have seemed equally outlandish to other cultures:Asymptosis…fee-simple ownership is not the only basis for ownership and possession of land. Many eastern cultures and tribal cultures throughout the world follow the “communal property system” in which ownership of land belongs to the entire social/political unit, like the tribe, families, bands, and nations.From the inside, ideologies always look like common sense.
Thinking About “Assets” and Ownership
Steve Roth
It's not crazy. The King owns superior title to everything. Everything.
ReplyDeleteIn traditional Native American societies, yes land was owned communally within the tribe, but each tribe had to be willing to defend its territory against other tribes.
ReplyDeleteAs Ian Welsh explained recently:
"Equally important is the fact that we keep precisely, and only, the rights (which includes property and jobs) that we are able and willing to fight for. Any other rights we have in excess will eventually be taken away from, awaiting only someone with enough power to gain the opportunity and motive to do so.
This is the real law of the jungle. Nothing. You have no rights, no possessions. Nothing. Everything you “have” is because it was at one point in the interest of others that you have it. Once it is no longer in their interest, watch out."
BTW I second Steve's admiration for Matt Bruenig.
Of course the most insidious of these rights are intellectual property rights, where you can exclude people from an idea or concept - even though if you shared it you'd never have less of the idea or concept.
ReplyDeleteThe entire basis of them is flawed in the extreme - once you realise that creating them can be delegated to the tribe (R&D funded by government or Job Guarantee creative jobs).
Freedom of use of ideas and concepts would launch an unprecedented increase in the creativity and productivity of human kind. But we have a long way to go before we realise that.
Message this to the Bob Roddis of the world, property IS cohercion and violence. And power assymetry created by it is too.
ReplyDeleteNo Robinson Crusoe islands here, as every worthwhile asset is owned...
Fee-simple ownership - the forms of thought are stored in language- The "fee" here comes from enfeoff - Such ownership means you have been directly, simply, enfeoffed in your fiefdom by the sovereign, the king as Ryan says, or in modern times, the state. Only states, the sovereigns today have true(r) title to land - "allodial" title. Modern systems, as much as people try to hide or ignore it, are outgrowths, developments of the earlier ones, "communal property systems". The difference is that people used to have a better understanding of their own systems. :-)
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