Tag Archives: property rights

Dissecting property rights

Think about property rights.

Take this computer, for example. I’m assuming it’s yours. You own this computer. It would be wrong for someone to take it from you without your consent. You have the right to do whatever you want with it—destroy it, even.

Now think about your car. You own that car. It’s yours to keep until you don’t want it anymore, and nobody can take it from you without your permission. Same goes with your house, your dog, your lawnmower, your personal library.

But think too deeply about property rights, and you’ll realize things aren’t as clear cut as I’ve just made them out to be. For example, I’ve listed only material goods thus far. It’s easy to imagine when rights to ownership in material property is violated. But what about non-material property, like trademarks and slogans?

Coca-cola, for example, owns the word “Coca-Cola.” It’s a different type of ownership, though, because others are allowed to use the word as often as they want. I, for one, say it all the time. I’m even writing it here. COCA-COLA.

Have I violated Coca-Cola’s property rights? I don’t think so, but I’m actually not sure. If I have, who exactly have I harmed? To whom does the word “Coca-Cola” belong? John Pemberton came up with the name sometime in the late 19th century, but he’s not alive anymore. Technically the word belongs to The Coca-Cola Company in Atlanta, GA, so I’ve violated the company’s rights to the word. But people at this company come and go. It’s probably the case that no one works there today who worked there 50 years ago. The company, then, exists independent of the people who work there, which means the rights belong to an inanimate, non-living thing. What other property rights can inanimate, non-living things hold?

Another area where property rights get confusing is with regard to how ownership begins. When John Cabot claimed all of North America for England in 1496, did all of North American belong to England? I think most would say no. But what if he laid claim to a small, uninhabited island off the coast of Maine—would that be ok? I think most would say yes, as long as the island had truly never been inhabited before. First come, first serve, right?

There’s another gray area—first come, first serve. Imagine a pile of cash on the sidewalk left by someone as a gift to passersby. Say there’s a sign on the pile indicating that the gift belongs to whoever finds it and wants it. Both my neighbor finds the pile and calls me to come look at it. I grab it and take it for myself. Is it “rightfully” mine, as in no one is allowed to take it from me? He saw it first, but I grabbed it first. Who has the better claim, if any claim at all? Perhaps the city, who owns the sidewalk on which the cash was placed.

These are hypothetical situations, of course, but analogous situations are happening all the time in the realm of intellectual and digital property. These are serious issues with real-life implications.

My point here is to show that property rights aren’t very black-and-white, and that we should be careful when tinkering with them. Rights to intellectual property, digital property, privacy, and even material goods are fragile things. I don’t think anyone knows exactly how to divvy these things up. So take care when talking and thinking about property, and do what you can to further this dialogue in a helpful way—a way that recognizes both the undeniable importance of property rights to sustaining a rational market order and the gray areas inherent in the very notion of property.

Property rights and violence

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.”