I just read Armen Alchian’s entry on “Property Rights” in the Concise Encyclopedia on Economics. I was assigned this piece for my Microeconomics I class–part of the MA in Economics program at George Mason University.
The piece was straightforward enough, but one sentence raises more questions for me than it answers. Near the beginning of the entry, Alchian writes:
The fundamental purpose of property rights, and their fundamental accomplishment, is that they eliminate destructive competition for control of economic resources. Well-defined and well-protected property rights replace competition by violence with competition by peaceful means.
My issue here is that enforcing property rights is itself a violent endeavor. Even if violence does not actually happen, the threat of violence is how property rights are protected. In this sense, property rights don’t eliminate destructive competition for control of economic resources. Property rights are simply a less obvious form of violence. They don’t “replace” competition by violence, but are simply one of the many ways in which violence can be employed to allocate resources in a somewhat consistent manner. What it does replace, however, is random and unsystematic use of violence.
Think about it this way: Those who agree to abide by a set of property rights are choosing to use violence against those who do not abide by such property rights. They, as one big unit, are the ones competing for resources with violence against the other unit(s) of people who reject such property rights. Where violence is “replaced” is only within this unit. It still exists between competing units–alternative, demonstrated beliefs about how resources should be allocated.
Finally, I use the word “somewhat” quite intentionally two paragraphs above because, as even Alchian notes, property rights can be confusing. He writes:
The complexities and varieties of circumstances render impossible a bright-line definition of a person’s set of property rights with respect to resources. Similarly, the set of resources over which property rights may be held is not well defined and demarcated. Ideas, melodies, and procedures, for example, are almost costless to replicate explicitly (near-zero cost of production) and implicitly (no forsaken other uses of the inputs). As a result, they typically are not protected as private property except for a fixed term of years under a patent or copyright.
The fact that significant grey areas exist with regard to both people’s understanding of property rights and the various ways in which property rights are enforced in the real world only reinforces the idea that they are simply one specific way in which violence is employed to allocate resources–not a replacement for violence or some entirely different paradigm. If someone believes, for example, that he can hold property rights in the air for 10 feet in every direction of where he is standing, then enforcing laws that do grant him such rights equals the use of violence against those who violate this alleged right but disagree that it is indeed a right.
This is a subtle point. I might be messing it up. I guess the big picture here is that property rights are just one way to use violence–not a replacement for violence. Thinking in terms of the market paradigm vs. the violence paradigm oversimplifies this very complex issue.
What’s really going on, I think, is a general agreement that one particular way of using violence is the most efficient way. It all happens under the same “violence paradigm.”