Thoughts on economics and liberty

What are property rights? Is there any “natural” right to use one’s property?

This is a post where I’ll spend time to think about the core meaning of a property right.

From what I understand a property right is merely a naming right. It is a claim of ownership. It does not imply the right to use property without regard to its impacts on the rest of society.

Property is a title, an attribution, no more. It’s value is determined only subjectively, in the eyes of the beholder. It has little or nothing to do with it’s objectives is use right. As they say, “The right to swing my arms in any direction ends where your nose begins”.

Thus you can own a car and keep it quietly inside your house, but using the car requires a licence so that you can be traced if you harm someone and also to charge you appropriately for various taxes to deal with the harm caused to roads and to other users, to pay for roads, etc.

The use of property necessarily implies interaction with the property of others.

Therefore, the mere ownership of property is not license for its use. Yes certain uses are implicit in the title over a property, but these implicit uses are ultimately determined through interaction of that property with other properties.

User property is the domain of negative externalities in its interaction with other people’s property.

I will study Alchian and Demsetz very closely, again.

DEMSETZ’s view

An owner of property rights possesses the consent of fellowmen to allow him to act in particular ways. An owner expects the community to prevent others from interfering with his actions, provided that these actions are not prohibited in the specifications of his rights. [Source]

Thus, according to Demsetz, property rights are a bundle of {ownership claim, use rights}.

In my current view, use rights are not automatic attributes of property. Many a time, without use rights property rights may not have much value. But this is not always true. The value of Mona Lisa remains the same regardless of whether it is on public view or stashed away 1 mile below the surface.

 

Sanjeev Sabhlok

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