Thursday, April 22, 2010

historical origins of private property

"The Myth of the Tragedy of the Commons," an "oldie-but-goodie" by Ian Angus. I revisited this piece for some work I'm currently doing on law and economy/society in early 19th century U.S. history. It's central thesis is that throughout history, societies have found ways of maintaining communal property rights, rather than privatize, with great success. The issue is of great historiographical importance. Any attempt to explain the historical emergence of private property in a society must have some explanatory framework to govern it. And if the evidence shows that societies have been successful at maintaining communal property rights then a simple explanation of private property's emergence based on inherent characteristics of individuals (such as self-interest) may not be plausible. While Marx (Capital Vol. 1 Ch. 27) gave us one explanation for the emergence of private property a long time ago, more recent attempts, such as those of Winifred Rothenberg (From Market Places to Market Economy), have taken the view that it was an individual effort to set up private property, in order to avoid the "Tragedy of the Commons" -- she applies this to early U.S. history. Read the Angus link for how this may not have been how the institutions came about.

The question then inevitably arises -- Whose Efficiency? (by Rick Wolff) If private property arose for "efficient" reasons, when communal property has also been shown to be efficient, then we have two equilibria and we need to explain why one was chosen over the other. So, efficiency for the landowners or efficiency for the peasants?

A good quote from Angus:

The implication is that private owners will do a better job of caring for the environment because they want to preserve the value of their assets. In reality, scholars and activists have documented scores of cases in which the division and privatization of communally managed lands had disastrous results. Privatizing the commons has repeatedly led to deforestation, soil erosion and depletion, overuse of fertilizers and pesticides, and the ruin of ecosystems.

An argument commonly leveled against this view emphasizes the social efficiency gains of private property. However, this is by no means an absolute law. Economists such as Daron Acemoglu ("Technology, Information, and the Decentralization of the Firm", QJE 122(4)), as well as other social scientists, have studied the relationship between technology and the social relations of production. Specifically, they have identified certain technologies and forms of knowledge production with more decentralized forms of firm governance. Think about Google vs. GM, or the cooperative software companies in California.

Of course, the historians have long known these things! Great to hear this research is gaining more attention though.

3 comments:

  1. Ummm... Angus seems worrisomely similar to Hardin, in that he offers "studies up the wazoo" without bothering to cite them; moreover, as an obvious ideologue, Angus may evoke interest in his thesis, but no assurance that he has proven it. Too much talk; too little boring evidence.

    It seems to me that regardless of the truth of Hardin's story, the simultaneous emergence of private property and the industrial revolution in late 18th century England suggests a link. My thoughts on the link are not that there is some "efficiency meter" as such, but that the decline in the power of the aristocracy and the concurrent rise in the power of merchants and the richer class of farmers (i.e., mercantilism) in England at that time provided both a market for industrially-manufactured consumer goods, and a preventative of the power of the rich to tax this wealth away from them -- this preventative being enshrined in the so-called "God-given 'right' to private property" found in the philosophy of John Locke, one of the founders of the new field of economics.

    That is, just because common property holders have in many cases been able to prevent ecological disaster over millenia doesn't mean that this is a "God-given" way to organize production, any more than Locke's explanation. Here we are in the modern scientifically-driven world, capable of discovering evidence and applying solutions in ways that were beyond the wildest dreams of Locke or Marx. We are moving toward a globalized world in which there is private property the use of which is constrained by the external implications of its misuse so as to reduce the sustainability of our consumption of resources -- a kind of blending of the two, during which advocates of both extremes are screaming and kicking at the top of their lungs.

    I just hope rationality wins soon...

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  2. There is certainly a large body of literature that has shown how property rights were redefined in the 13th-18th centuries by those in power. We are in agreement on that.

    I think that the issue of Hardin vs. Angus/Marx/whatever is not one of ideologies. The issue is how you see and analyze a change in political institutions occurring. If political institutions are a function of economic efficiency then private property rights arise for this reason.

    The alternative view, which holds up much better when considering the history, is that there is no such thing as a socially optimal distribution of property rights because all property rights are intensive -- i.e., they confer monopoly power onto the owner of the property rights. Private property, in other words, does not foster competitive markets -- you need some restrictions on them in order to actually _promote_ competition.

    At the very least, what this means is that there is some (monopoly) interest at stake behind alternative property rights definitions, which presumably is what determines institutional change.

    To be honest, this is what I see is the real lesson behind Angus' argument. It certainly has a ring of ideology behind it, but the fundamental point of the article is supported by the evidence.

    Thanks for the comment! -- and might I add -- rationality NEVER wins~!

    :)

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  3. Rationality wins if and only if the right brain's pleasure centers like the rational answer. So all those human emotions and evolutionary dead-ends will limit the rise of rational discourse, as it has since Adam and Eve took hold of that particular cortex.

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