Showing papers on "Private property published in 1993"

Economic Growth and Decline with Endogenous Property Rights

Abstract: This paper introduces endogenous property rights into a neoclassical growth model. 1t identifies a mechanism that generates growth rates which are increasing at low levels of capital. and decreasing at high levels of capital. The driving force behind changes in property rights is the attempt of each rent-seeking group to secure exclusive access to a greater share of capital by excluding others. We characterize an equilibrium in which there is a shift from common to private property, followed by a switch back to common property.

The London Hanged: Crime and Civil Society in the Eighteenth Century

Abstract: In eighteenth-century London the gallows at Tyburn was the dramatic focus of a struggle between the rich and the poor. Most of the London hanged were executed for property crimes, and the chief lesson that the gallows had to teach was: 'Respect private property'. The executions took place amid a London populace that knew the same poverty and hunger as the condemned. Indeed, in this stimulating account Peter Linebaugh shows how there was little distinction between a 'criminal' population and the poor population of London as a whole. Necessity drove the city's poor into inevitable conflict with the laws of a privileged ruling class. Peter Linebaugh examines how the meaning of 'property' changed substantially during a century of unparalleled growth in trade and commerce, analyses the increasing attempts of the propertied classes to criminalize 'customary rights'--perquisites of employment that the labouring poor depended upon for survival--and suggests that property-owners, by their exploitation of the emergent working class, substantially determined the nature of crime, and that crime, in turn, shaped the development of the economic system. Peter Linebaugh's account not only pinpoints critical themes in the formation of the working class, but also presents the plight of the individuals who made up that class. Contemporary documents of the period are skilfully used to recreate the predicament of men and women who, in the pursuit of a bare subsistence, had good reason to fear the example of Tyburn's 'triple tree'.

Forward pricing and the housing market: The pre‐sales housing system in Taiwan

Abstract: Summary In countries that have experienced rapid economic development the need to establish more efficient markets in which private property can be constructed has induced some innovative solutions. One such solution is the phenomenon of a pre‐sales market that can be observed in Taiwan, Korea and more recently in China. Developers sell their property before building is started to acquire financing for the development companies. This paper discusses the process and, by recognizing the analogy between the pre‐sales market and forward markets, analyses the implications for developers.

The Economic and Political Liberalization of Socialism: The Fundamental Problem of Property Rights

Abstract: All our previous political experience, and especially, of course, the experience of Eastern Europe and Central Asia, offers little hope that democracy can coexist with the centralized allocation of economic resources. Indeed, simple observation suggests that a market economy with private property rights is a necessary, although not sufficient, condition for the existence of a democratic political regime. And this accords fully with the political theory of liberalism, which emphasizes that private rights, both civil and economic, be protected and secure. At the same time, our previous experience also indicates that market economies are more successful than centrally planned economies not only in producing, but also in distributing, both private and collective goods. This economic experienee is supported by neoclassical economic theory, which treats clearly defined and secure rights to private property as essential to a market economy.

Public versus regulated private enterprise

Abstract: A comparison of public enterprise with regulated private enterprise shows that the efficiencies of privatization stem from the insulation it brings from arbitrary political and self-serving influences. The critical insulation springs from the costliness of interventions when there is a regulatory compact in place that protects private property from expropriation while it also corrects for market failures. That same insulation means that public enteprise is a better form of organization for activities that call for a response to public interest exigencies which cannot be specified in advance or reliably adjudicated after the fact. The analysis emphasizes that an appropriate regulatory compact requires institutional support. International organizations that seek to implement privatization should consider promoting credible regulatory commitment by requiring countries to execute explicit regulatory compacts and by bringing to bear the weight of their continuing relationship as a means of motivating the countries to conform to such strictures.

The moral legitimacy of intellectual property claims: American business and developing country perspectives

Abstract: Private property forms the bedrock of the business/society relationship in a market economy. In one way or another most societies limitwhat people can claim as property as well as theextent of claims they can make regarding it. In the international arena today intellectual property rights are a focal point of debate. Many developing countries do not recognize the monopoly claims of patents and copyrights asserted by business as legitimate. This paper reviews contemporary areas of dispute and then presents the tasks facing the construction of a fair intellectual property rights regime.

The Pre-Petrine Law of Property

Abstract: The development or lack of development of private property rights in Russia commands interest and significance far beyond the narrow confines of legal history. The institution of private property serves not only as a bulwark of stability but also as a limit to the state's authority. In the words of Richard Pipes, "Ownership of property creates a commitment to the political and legal order since the latter guarantees property rights: it makes the citizen into a co-sovereign, as it were."1 Elsewhere Pipes notes that in the west private property "confronted royal power with effective limits to its authority."2 However sound Pipes's analysis of the significance of private property, his treatment of the history of this institution in Russia is more controversial. According to him, the absence of this institution in Russia allowed the tsar to exercise absolute dominion over everything and everyone. To Pipes, the Muscovite tsardom was a patrimonial state where political authority was exercised as an extension of the right of ownership and where the law failed to distinguish between property belonging to the tsar, the state and private citizens. So undeveloped was the concept of private property, he argues, that there was not even a word for property. In essence all property was the sovereign's.3 The prerevolutionary legal historian Sergeevich posited a similar theory in 1910.4 Pipes's thesis that Russia lacked a true tradition of private property is generally shared by Soviet-marxist historians. For example, Man'kov, one of few Soviet scholars to have seriously discussed the legal incidents of ownership of hereditary estates (votchiny), nonetheless concluded that hereditary estates were not private but "feudal" property because tenure was conditional on service.5

Potential Economic Benefits from Efficient Harvest of New England Groundfish

Abstract: Dissipation of economic benefits from commercial harvest of the multispecies groundfish resource in U.S. waters off New England was estimated from dynamic optimization of empirical bioeconomic models. Net economic value could be maximized by an estimated 70% reduction in fishing effort, resulting in a sevenfold increase in the size of the harvestable resource and a threefold increase in sustainable yield, Under these conditions, fishers, seafood industries, and consumers could benefit from an estimated US$150 million increase in sustainable net economic value each year, including about $130 million in resource rent. Consumers in the region could profit further from the nutritional and health benefits of up to an additional 6 Ib of fresh fish per capita. Policies to achieve these benefits are highlighted. Augmenting state ownership of the resource with market transfers of individual effort or harvest quotas is preferred to open access, but common property or individual private property regimes are...

Evolving Legal Frameworks for Private Sector Development in Central and Eastern Europe

Abstract: The legal framework in a market economy has at a minimum four basic economic functions: to define the universe of property rights in the system; to set a framework for exchanging those rights; to set the rules for the entry and exit of actors into and out of production activities; and to oversee market structure and behavior to promote competition. These basic areas of law are joined by other important ones - such as labor, taxation, and banking, to name just three, that comprise the complex legal frameworks for private sector activity in advanced market economies. This discussion paper uses this general classification to analyze the evolving legal framework for private sector development in six transforming socialist economies of Central and Eastern Europe - Bulgaria, the Czech Republic, Hungary, Poland, Romania, and Slovenia. It suggests some fundamental questions such analysis should address and provides a summary of developments in these countries. The most difficult and contentious challenge involves allocating real property rights, designing rules for the exit of ailing firms, and creating the conditions for free and fair competition. Although the legal structure is evolving rapidly in most areas, practice is still vey uncertain. The wide discretion and general lack of experience create legal uncertainty that hampers private sector development in the short-run.

The Social Origins of Property

Abstract: It was easier to make a revolution than to write 600 to 800 laws to create a market economy. Jiri Dienstbier, Foreign Minister of Czechoslovakia (1990) [I]t would be as absurd to argue that the distribution of property must never be modified by law as it would be to argue that the distribution of political power must never bechanged. Morris Cohen (1927) The takings clause of the United States Constitution requires government to pay compensation when private property is taken for public use. When government regulates, but does not physically seize, property, the Supreme Court of the United States has had trouble defining when individuals have been deprived of property rights so as to give them a right to compensation. The takings clause serves “to bar Government from forcing some people alone to bear public burdens that, in all fairness and justice, should be borne by the public as a whole.” To determine when a regulation amounts to a “taking” of property requiring compensation, the Court has rightly stated that the ultimate question is whether the burden of regulation has been unfairly placed on a small class of individuals rather than the public at large. To answer this question, the Court has identified a variety of factors to consider, including the character of the governmental action, (whether the regulation effects a permanent physical invasion, destroys a core property right, or is intended to prevent public harm), whether the regulation interferes with reasonable investment-backed expectations, and the extent of the diminution in value of the property (particularly whether the regulation deprives the owner of any economically viable use of the property).

The impetus for recognizing private property and adopting ethical behavior in a market economy: Natural law, government law, or evolving self-interest

Abstract: ises (1949, p. 725) convincingly argues that, given the existence of the long-run objectives instilled by private property rights, cooperation in the form of division of labor and trade emerge naturally; and therefore, under these circumstances, \"there is no need to enforce cooperation by special orders or prohibitions.\" His explanation is clear: when private property rights are defined and enforced, the

Anarchy, uncertainty, and the emergence of property rights

Abstract: This paper investigates whether Lockean first claimer property rights should be expected to emerge in anarchy. Individuals behind a veil of uncertainty about their future wealth decide independently whether to commit to using fcrce. Neither the contractarian hypothesis that a thicker veil of uncertainty supports more co-operation nor Demsetz's hypothesis that well-defined property rights emerge as the value of the externality from not having private property increases is unambiguously implied by the model.

Capitalism, socialism, and democracy revisited

Abstract: Fifty years ago, Joseph Schumpeter published "Capitalism, Socialism, and Democracy", his classic study of the relationship between political democracy and alternative economic systems. Although Schumpeter's work continues to be widely read, many of its central conclusions have been called sharply into question by the developments of recent years. In this book, the editors bring together distinguished scholars of international stature to address the full range of questions involved in assessing the relationship between democracy and alternative economic systems. Among these questions are: does political democracy require a market economy, and/or private property, and/or limitations on the state's economic role? What specific aspects of capitalism and socialism are especially conducive or detrimental to democracy? Is there a viable "third way" between capitalism and socialism?

Young People and the Policing of Community Space

Abstract: This paper explores the issue of the policing of young people in urban public spaces. Building upon previous work which examines how general community space in the urban environment is socially constructed, the paper discusses how aspects of police culture are linked to specific types of policing. It is argued that police practices are directed to protecting private property, maintaining personal security and at regulating the moral character of street life. In the context of a significant shift in the position of young people as consumers, it is suggested that the economic and social marginalisation of different groups of young people has fuelled an increasingly negative relationship between the police and young people. The contest over community space, and official state concerns revolving around “crime” and “propriety”, guarantee that social conflict will be heightened rather than reduced by current forms of police intervention in the lives of young people.

Public waste and private property. An enquiry into the economics of solid waste in Calcutta

Abstract: Perceptions of solid waste management in India belong to a tradition of thought which dates back to the early nineteenth century. Solid waste is often thought of as a purely municipal problem. The paper examines how far informal systems of solid waste management are a response to a void in property rights. It analyses the variety of local operations in Calcutta, including the informal system. The assumptions that solid waste management is a public good that therefore needs to be municipalized and that in the absence of municipalization there would be greater costs are both questioned. It is hypothesized that there may be no measurable economies of scale in any part of the waste cycle. It may be more worthwhile to improve and expand the informal system of waste management than to collectivize further the traditional system of collection, transportation and disposal.

Aristotle on Property

Abstract: I JONATHAN BARNES HAS WRITTEN RECENTLY that "Aristotle's remarks [on property] in the Politica are too nebulous to sustain any serious critical discussion."(1) Some scholars are (a bit) more confident about successfully getting to the bottom of Aristotle's opinions concerning property, but few have dealt with the topic in any detail.(2) In this essay I shall investigate the relevant texts on property from the Aristotelian corpus, beginning with an especially careful look at Aristotle's criticism of Plato's communism of property. I shall also consider the historical and cultural context in which Aristotle was writing. The result will be, I hope, a full account of, and hence a better understanding of, Aristotle's views on property.(3) II It hardly needs to be said that Aristotle is not an ascetic of any kind: he believes that human happiness requires all kinds of external goods, including wealth or property.(4) The important question for us is, In what form (politically, socially) should property be held? Aristotle considers three possible arrangements concerning property(5) and its use: (1) property is private, use is common; (2) property is common, use is private; (3) property is common, use is common. Why does Aristotle not consider a fourth option: property is private, use is private? Miller claims he omits this option because "he is not defending a system of unqualified privatization."(6) But this is not the reason. As we shall come to find out (in section IV below) one friend giving something to another, or in fact any act of generosity, falls under private property, common use (view [1]). For instance, this horse is mine, but I share it with (that is, make it common to) my friend. Thus, this fourth option--private property, private use--is no option at all, for it would be a property arrangement that systematically rules out any kind of giving or sharing of one's private property.(7) Aristotle gives examples of each of these arrangements: For example, [1] the plots of land are separate [that is, private], while the crops are brought into the common [store] [unkeyable] and consumed [in common], just as some of the nations do. Or [2] the opposite: the land is common and farmed in common, while the crops are divided with a view to private use (some of the barbarians are said to share in common in this way, too). Or [3] the plots of land and the crops are common. (Politics 1263a3-8)(8) It is extremely important to keep in mind that the three examples he mentions are just examples. So although Aristotle's position will fall under one of the three possibilities--we later find he accepts view (1)--that position may be quite different from the example he gives here.(9) The question for Aristotle now becomes, Which is better, a private property arrangement (view [1]) or a system where property is common (view [2] or [3])? Aristotle presents several arguments against the latter and for a private property system. III Aristotle begins his criticism of the communism of property with what has been (correctly) called a "standing difficulty of communist schemes":(10) Now if the farmers were different [from the citizens], the manner [in which property would be managed (cf. 1262b37-38)] would be different and easier; but if they [that is, citizens who are farmers] do the hard work [unkeyable] by themselves, the arrangements concerning possessions will lead to greater discontent [unkeyable]. For in fact, when in enjoyment and in work they are not equal, but unequal, accusations [unkeyable] will necessarily be raised against those enjoying or taking many things while laboring [unkeyable] little, by those taking less while laboring more. (Politics 1263a8-15)(11) Is Aristotle criticizing the communism of property here simply because he thinks it is impractical (that is, it leads to greater discontent, which is inimical to the city's unity), or, beyond this, does he hold that such a system is unjust as well? …

War, pillage, and markets

Abstract: Neoclassical economic theory has produced an extensive body of knowledge about market exchange based on cooperative relations: private property. This leads to an artificial dichotomy between cooperation and conflict though. It is best to view market exchange as lying along a continuum of conflict and cooperation. Conflict and cooperation are intertwined. From a game theoretic model of Hobbes' world, I show that a number of property rights structures are possible. Each is characterized as possessing varying degrees of conflict and cooperation. Finally, from a repeated game, I show how conflictual relations (mutual predation) may support more cooperative relations (private property). This new equilibrium is sub-game perfect.

The Early Marx on Needs

Abstract: Following the first widespread dissemination of Marx' s early writings, his treatment of human needs was often taken as the basis for a critique of the 'false needs' created by capitalism and its consumer culture. 1 'True needs' for meaningful social interaction were counterposed to the 'false needs' for ever more consumer goods. Along with this went a tendency to construe the very idea of natural needs, needs given by our physiological nature, as an artifact of capitalist social relations. As the post-war boom has given way to a succession of major recessions in the advanced capitalist countries over the last twenty years, and the absolute impoverishment of parts of the Third World, the critique of consumerism has come to look increasingl y irrelevant. Correspondingly more recent work on Marx' s conception of human needs has tended to emphasise their basis in our natural physiology. This enables the degree to which they are satisfied to provide a simple but solid standard against which to condemn capitalism for its periodic reduction of masses of the world's population to poverty.4 Ted Benton (1988) has recently attempted to use such a 'naturalistic' conception of human needs, in which the distance between human and animal needs is reduced and animals' needs are also given normative weight, to argue for an ecological content to Marx's thought. 5 Both lines of interpretation, then, look to Marx for a conception of our 'true needs' , although in the one case the implicit model of human need is something like the need for friendship, while in the other it is more like the need for cooked food. In this paper I will argue that Marx does have a concept oftruly human needs. I will side with the first line of interpretation and against the second in seeing these needs as qualitatively distinct both from animal needs, and from needs as they are experienced by humans under capitalism. However, by contrast with the first line, I shall argue that Marx does not see the needs experienced by humans under capitalism as 'perverted' or 'distorted' versions of truly human needs. Rather, capitalism, or at least commodity production, is the means whereby truly human needs are constituted, albeit in an estranged form which can only be overcome through the abolition of both capitalism and commodity production. Marx 's concept of need has to be understood in the context of his philosophical anthropology, that is, his general theory of man.6 As a first approximation, for Marx man's essence is constituted by his needs. So he says in the Notes

The Justice of Economic Efficiency

Abstract: The central problem of political economy is how to organize society so as to promote the production of wealth. The central problem of political philosophy is how to arrange society so as to make it a just social order.

From the Economics of Laissez Faire to the Ethics of Libertarianism

Abstract: Ludwig von Mises, without a doubt one of the most rigorous defenders in the history of economic thought of a social system of laissez faire unhampered by any governmental intervention, admits to two and only two deficiencies of a pure market system. While according to Mises it is generally true that a market economy produces the highest possible standard of living, this will not happen if any firm succeeds in securing monopoly prices for its goods. And the market cannot itself produce the goods of law and order. Law and order, or the protection of the legal framework underlying the market order, are rather considered by Mises, in current terminology, as “public goods,” whose production must be undertaken by the state, which is not itself subject to the discipline of the market, but instead relies on coercion, in particular on compulsory taxation.

The Right to Wander: Issues in the Leisure Use of Countryside and Wilderness Areas

Abstract: The right to wander refers to the right to be on land or water for reasons of sport, leisure and pleasure with only minimal common sense limitations — a right that is denied to the vast majority of people. This paper represents a preliminary attempt to show how notions such as private property are actually social constructions, defined by a powerful minority in its own interests; how challenges to these social constructions by representatives of the majority resulted in a series of unsatisfactory accommodations in the form of national parks and other limited protected areas; how even these unsatisfactory accommodations came under attack in the conservative political economy of the 1980s; and, how some alternative social constructions are possible that will result in far more democratic definitions and uses of countryside and wilderness areas. The present trend points toward decreased access to countryside and wilderness areas. This trend will continue if the vast majority of the world's population who are...

Seeking Institutionalist Signposts in The Work of Henry George.: Relevance Often Overlooked

Abstract: I Introduction INSTITUTIONALISTS do not claim Henry George as one of their own. George's work in general would be considered teleological and thus removed from the evolutionary approach to political economy. Much of Georgian economics is based on natural laws and religious teachings which institutionalists have challenged since the time of Thorstein Veblen. The evolutionary approach is centered on an analysis of constant change and rejects predetermined ends or finality in economics; yet, a closer look at Georgian economics reveals that his work is more processual (and thus more evolutionary) in nature than is commonly thought. Important institutionalist signposts can be found in the work of Henry George. One of the most important signposts is the recognition and analysis by George of institutions. Both George and Veblen described the nature of institutions as being habitual forms of behavior and thought. George explored the invidious nature of institutions (especially private property) which would lead to an inequitable distribution of income and wealth and thus ensure the perpetuation of poverty. As Jurgen Backhaus and J.J. Krabbe note, George understood that there are "institutions in society which hold back economic progress."(1) George warned of the inclination of orthodox economics to serve as apolgetics for an unjust system. Institutionalists from Veblen to William Dugger would later follow in this critique of the economics profession. As a result of this, both institutionalists and George have at best been ignored and at worst been ridiculed by orthodoxy. They are in effect professional outsiders within their own discipline. Henry George was a social reformer. He was not satisfied with merely describing the unjust poverty of his time; to the contrary, he advocated major social reform of the system. The call by George for reform was later incorporated into the work of John R. Commons and now appears in the neoinstitutionalist work of Marc Tool and Kendall Cochran. The purpose of this paper is to explore the institutionalist signposts which appeared in the work of George long before the institutionalist school began. The recognition of these signposts should generate an increased appreciation for the relevance of Henry George. II The Economics of Henry George RENT WAS UNEARNED INCOME to George. People were entitled to keep only that income which resulted from their own labor. It is important to note that George advocated the confiscation of rent and not of land; consequently, he did not favor the nationalization of real property. Private ownership could be tolerated as long as the landowner received the same compensation as the other factors of production--a normal rate of return. The unearned portion of income in the economy came from the productive forces of the land and the landowner contributed nothing to this process. George advocated a "single tax on land value" that would confiscate the unearned income from the private ownership of land. The tax would "abolish all taxation save that upon land values."(2) George thought such a tax would still allow the private ownership of land but at the same time eliminate the surplus of landowners. For George, natural laws were "the immutable will of God" and could not change because of "observation and reason." The classical school confused "laws of man" with "laws of nature." For George, the intent of natural order was the equality of men. John Dewey believed that George adopted historical concepts of nature as "a means of expressing the supremacy of ethical concepts" and stated that "I think George was in the right."(3) George's concern for equality and ethics in economic analysis which distinguishes him from more traditional economists, is also shared by institutionalists. As institutionalists emphasize today, George centered his analysis in an interdisciplinary approach. The questions he explored were forced upon him by the subject matter under consideration and not by some disciplinary boundaries that developed at other times and under other circumstances. …

Postsocialist privatization and agency-related property: from Coase to Locke

Abstract: Differing concepts of private property and the state (Hobbes, Locke, and Smith) are discussed on an abstract level as well as to their relevance regarding transition in the countries of Soviet socialism. This discussion provides arguments to support the following claim: to gain an adequate understanding of what privatization means in the context of Eastern European reforms, it is essential to use models of thought which (1) relate property rights to agency and production and (2) treat political, judicial, organizational and spontaneous processes of establishing and enforcing rights as endogenous elements of the analysis. This would imply that for an attempt to conceptualize ‘transition’ and ‘privatization’, traditional neoclassical analysis might be misleading: it treats private property rights (‘endowments’) as related to exchange only and holds that they exhibit no patterns which are relevant to the analysis of a market society. It treats them as exogenous and hence arbitrary.

Selling the state or building a society: Private property reforms in west and east

Abstract: The history of property reforms in an advanced capitalist country is used as an analytical framework for identifying the magnitude involved in establishing conditions for market Economics in East and Central European countries. The Danish case is developed to distinguish between three aspects of property rights: the concrete, the formal and the normative. It is argued that only in the case of homology between the three is it possible to talk about a society organized according to the principle of a market economy. The Danish case shows that forms of ownership can be complex and that the establishment of homology is much more than a question of how to distribute legal protection and economic incentives. Privatization programs in five post-socialist countries are compared. Variations in processes and strategies are pointed at and the shortsightedness and simplicity of strategies in relation to lessons learned from the Danish case are underlined.

Melding Private and Public Interests in Water Rights Markets

Abstract: The debate over pnvatizing and water markets has moved back and forth for decades between the “I” and the “We” perspectives. Rather than either/or, a balanced “I&We” view of water institutions is needed. West is meeting east in water law. Public interest needs must be satisfied in appropriate decision forums, but marketing may prove a social improvement when used as a supplement. Balancing an “I&We” institution involves establishing an acceptable or tolerable level of interference through judicious mixing of state, common and private property regimes. Third party effects are eliminated as mutual gain arises in a variety of decision forums.