Overall Themes:
- The Law, Social Institutions and Policy:
- Why this approach? Why this theory?
- Whose interests are affected?
- Why this decision? Why does it matter?
- Normative Approaches
- How do the Results Effect Future Parties?
Some Interesting Questions to think about:
- Property and its Relationship to Personhood
- Efficiency and Economic Reasoning
- Justice and Fairness
- Distinction Between Property Rules vs. Liability Rules
- Property Rules: If I own something, I can exclude other people. If they want to buy or want access to it, they have to agree to my price.
- An entitlement is protected by a property rule to the extent that someone who wishes to remove the entitlement from its holder must buy it from him in a voluntary transaction in which the value of the entitlement is agreed upon by the seller. It is the form of entitlement which gives rise to the least amount of state intervention: once the original entitlement is decided upon, the state does not try to decide its value. It lets each of the parties say how much the entitlement is worth to him, and gives the seller a veto if the buyer does not offer enough. Property rules involve a collective decision as to who is to be given an initial entitlement but not as to the value of the entitlement.
- Liability Rules: Have to give people access as long as they are willing to pay a “fair” price (as determined by a third party, e.g., a court)
- Whenever someone may destroy the initial entitlement if he is willing to pay an objectively determined value for it, an entitlement is protected by a liability rule. This value may be what it is thought the original holder of the entitlement would have sold it for. But the holder's complaint that he would have demanded more will not avail him once the objectively determined value is set. Obviously, liability rules involve an additional stage of state intervention: not only are entitlements protected, but their transfer or destruction is allowed on the basis of a value determined by some organ of the state rather than by the parties themselves.
- Inalienable entitlements: given right that you cannot sell
- Property interests in your body
- Right to vote, right to your labor, etc.
- An entitlement is inalienable to the extent that its transfer is not permitted between a willing buyer and a willing seller. The state intervenes not only to determine who is initially entitled and to determine the compensation that must be paid if the entitlement is taken or destroyed, but also to forbid its sale under some or all circumstances. Inalienability rules are thus quite different from property and liability rules. Unlike those rules, rules of inalienability not only "protect" the entitlement; they may also be viewed as limiting or regulating the grant of the entitlement itself.
- Why does it matter?
- Figuring out our relationship w/r/t things affects control over self, control over things, control over others (to prevent you from having access to my stuff, or to act in a way with my stuff that affects you.)
- Liberty from the government: self autonomy, self-development, incentives to be productive
- Rules vs. Standards
- Rules (55MPH)
- Virtue of certainty, more easily administered, predictability
- Reduces strains on the judicial system and judicial competence
- Knowing the rules makes it easier to K around them
- Standards (You Must Drive Carefully)
- More flexibility
- If you do not know the default rule, it is harder to find ways around standards, or even to know which to choose (K vs. default rules)
- WHAT IS PROPERTY AND HOW IS IT ACQUIRED?
- Acquisition by Discovery and Capture
- Discovery vs. Conquest
a)Acquisition by discovery: sighting or finding of hitherto unknown or uncharted territory
(1)In Johnson v. M’Intosh, discovery gave the “exclusive right to extinguish the Indian title of occupancy, either by purchase or by conquest.”
(2)In principle, only a “res nullius” could be discovered; however, prior possession by aboriginal populations was thought not to matter.
b)Acquisition by conquest: taking possession of enemy territory through force, followed by formal annexation of the defeated territory by the conqueror
c)Not necessarily the case that Conquest is preferable to Purchase. Depends on ability to enforce conquest, as well as price of land.
d)Marshall argues that respecting the Law as Settled is reason to follow chain of title from European discovery, handed down to colonies, and from American government to individuals.
(1)Pros:
(a)We value order and predictability
(b)Eliminates uncertainty in future Ks (discourages people from entered Ks)
(c)Encourages Trade. Providing for easier transfer (better for economy if trade is enabled and parties benefit; key to economic growth)
(d)Discourages Waste (and also provides incentives to improve the land and invest in it.)
(e)Discourages complaints (if law is thought to be unchangeable, people will complain less)
(f)Don’t have to come up with a better way (and risk disagreement on it)
(2)Cons
(a)Provides justification of unjust society (e.g., slavery, segregation, racism, sexism, etc.)
(b)Idea that changes in society should be followed by changes in the law. The law as a living document that changes to reflect our values and circumstances as they evolve over time.
(c)Those who benefit from the current system are generally the wealthy and powerful who may arguably have less need for protection
- First in Time
a)Pros:
(1)The idea of “first come, first served” has intuitive appeal
(2)Sense of clarity: only one person can be first
(3)Decreased litigation: If the claim is easy to resolve, fewer lawsuits will be brought
(4)Scarcity/ Efficiency: Forces people to act quickly and take advantage of resources. Iincentive to be first; encourages competition. Encourages production and development if your right is protected.
(5)Public Peace: Not wasting time and resources trying to protect property.
b)Cons:
(1)Nothing ethically self-evident about it; no strong moral claim. Just because you grab it first means that you deserve it, especially when there are others who have not had an equal opportunity to grab.
(2)Competition may come at the expenses of other values (e.g. fairness, justice, distributional concerns)
(3)Privileges rich and powerful. Protects the status quo.
- Alternative Approaches to First in Time
a)Necessity: Greater need determines use
b)Leverage: Your professor wants it
c)Rights / Distributional Justice
d)Personhood
- Locke’s Ideas about Labor and Property
a)Right to property if you put your own labor into it
b)Provides incentives for people to add their labor to the fruits of the earth
c)Philosophically, he is saying that a man owns himself, and by putting the fruits of his own body, i.e., his labor, into the land, the man has a claim to that in the same way he has a claim to himself
- Johnson v. M’Intosh
a)Question is not just who was there first, but who was there first in the right way: Marshall decided that the Native Americans did not have title to the land, in part b/c:
(1)They were not the first “Christian” people
(2)They did not put an appropriate amount of labor into the land
b)Marshall argues that you have to consider not only the principles of abstract justice impressed by the Creator, and those principles which our government has adopted and given us as the rule
(1)Major premise (with little reasoning): The law is settled.
(2)Idea of precedent
- Discovery by Capture
a)In many ways, capture is just another form of discovery
b)Pierson v. Post: Pursuit alone is not enough to confer upon the pursuer property rights.
(1)Pierson’s Argument:
(a)Evidentiary issues: difficult to know who saw or pursued the fox first
(b)Pierson was more efficient in killing the animal
(c)Pursuit alone does not guarantee a kill
(d)First come, first served
(e)Why reward bad hunters?
(2)Post’s Argument:
(a)Time and labor spent chasing the fox
(b)Customs and norms; unwritten rules of the sport
(c)Pierson was acting in bad faith; he knew that Post was pursuing the fox.
(d)Disincentive to future hunters if they know that someone can come in and take their property right before it is caught and killed (Livingston’s dissent)
(e)May breed violence
(3)Livingston’s Dissent
(a)Relies on policy reasoning (providing incentive to hunters)
(b)Also believes that this is not an issue that should be decided by the court, but should rely on Norms and Customs (more on this in Ghen v. Rich
(c)Tempora Mutantur: times change, and the law should change with it.
c)Ghen v. Rich
(1)The killer of a whale is its rightful owner.
(2)Importance of custom and norms in determining decisions
- Customs and Norms
a)Pros:
(1)More efficient
(2)More narrowly tailored to the facts of the case
(3)More organic than what is coming from a third-party perspective who does not deal with the issues on a daily basis; involved parties have more expertise
(4)More flexible; allows for evolution of standards
(5)Decreases judicial costs and issues of judicial competency
b)Cons:
(1)Whose norms and customs?
(2)Norms and customs may lack any ethical or moral grounding
(3)Who benefits from the status quo? Are there others we need to protect?
(4)Community may take their own interests into account but not the interests of others: externalities may result
c)Lobster Gangs of Maine, Acheson
(1)
- Reasons to Prohibit Trespass
a)Trespass can lead to violence and self-help; general unrest and chaos
b)Resources that could be put to better use (time, money, efforts, resources) are spent on efforts to keep others out
c)Incentive Structure: No incentive to buy property if others can come and take it from you. Creates incentive to trespass; no one wants to work. Security provides incentive to develop land and use efficiently
d)On basis of rights: right to exclude others from use of your property, right to privacy
e)Prevents rewards to wrongdoers
- Externalities
a)Definition: cost or benefit that falls on some third party that the principal actor does not take account of
(1)Negative externalities: pollution, overgrazing of livestock, loud music at 3 a.m. from your neighbor’s stereo; society bears the costs, so the actor does not have to take into account.
(2)Positive externalities: renovations, public school system, concert pianist living next door.
b)Solving Externalities:
(1)Internalize through allocation of property rights to either party bearing cost or party creating externality
(a)One property right in clean air for neighbors
(b)One property right in factory owner to pollute
(2)If factory owner has right to pollute, the neighbors will have to pay him not to, up to what having clean air is worth to them
(3)Once the factory owner is notified of the harms to the neighbors, the externality is no longer present; the costs of pollution (i.e., harms to the neighbors) are taken into account in the factory owner’s costs
c)Coase Theorem
(1)It does not matter how you allocate property rights; so long as there are no transaction costs, the outcome will be the same b/c parties have the ability to transact to reallocate them if it is in their best interest to do so.
(2)Transaction Costs: organizational costs, attorney fees, enforcement, information costs, reaching of agreement, holding out, free riders
(3)Bilateral Monopoly: Although window of agreement exists, may never reach it b/c of hard bargaining and bluffing outside of the safety of a competitive market place
d)Outside Coase Theorem
(1)Efficiency: Who should be paying whom? What rights are we protecting?
(2)Coase theorem assume only constraints are transaction costs, when in reality budget constraints may exist
(3)Distribution concerns w/r/t fairness or equity
e)Alternatives to Property Rights
(1)Regulations: legislation, statutes, etc.
(a)Problems: lobbying, enforcement costs, imperfect information
(2)Taxes and Subsidies
(a)Does not require knowledge or optimal level; allows for greater flexibility
(b)Factory can decide how much to pollute, with increasing costs to do so
(c)Subsidize the activities we would like people to engage in.
- Hardin: The Tragedy of the Commons
a)Land is not allocated to an individual, but rather is used by all individuals (no right to exclude), and thus leads to externalities
- Demsetz: Toward a Theory of Property Rights
a) Externalities resulting from the Commons:
(1)Gaining benefits of common land while paying fraction of cost
(2)As resources become scarce, there is a bigger rush to use the resources before others do. We would have a better community outcome if we were able to coordinate
b)Solving the Problem
(1)Private property rights: people are more likely to take care of their own property b/c they bear the entirety of the costs
(2)Simplification of Transactions. Knowing who owns what makes it easier to deal with property owner.
B.Alternative Theories of Property
- Issues other than what we have discussed (efficiency, incentives to be productive, security of property rights, first in time) may be at stake when we decide how property rights should be allocated
a)Fairness
b)Justice
c)Distributional Concerns
- Goffman’s “Asylums: Essays on the Social Situation of Mental Patients and Other Inmates”
a)People care about property because it provides sense of ownership, control, autonomy, and power
b)Less about what you own; more about the capacity to own and use, to exclude others
- Radin’s “Property and Personhood”
a)Distinguishes fungible property from personal property and concludes that personal property rights should be higher in a hierarchy of rights, as the property is a part of one’s own personhood
b)People need to own their own things to become a fully constituted person
c)Provides justification for redistribution of wealth – of taking away one’s fungible property to allow others to gain personal property
- Friedman’s “Capitalism and Freedom”
a)Competitive capitalism separates economic power from political power and allows one to counterbalance the other
b)Is that necessarily the case?
- Sunstein’s “On Property and Constitutionalism”
a)When citizens are dependent on the good will of government officials, everything is a privilege rather than a right
b)A right to private property free from government interference is a prerequisite to democracy
c)This freedom is important, because coupled with economic power, it allows people to speak out against the government
d)Capitalism and the ability to possess money and resources are an important part of the political process
- Are Friedman and Sunstein’s claims too strong?
a)Soros’ success in the U.S. vs. owner of Yucos (Russian oil company) jailed for political reasons, specifically opposition to Putin
b)Continuum of freedom – political retribution and handouts also exist in the U.S. (e.g., Halliburton)
c)Does the reality of competitive capitalism in the U.S. (e.g., the distribution of wealth and resources) undercut the arguments made by Friedman and Sunstein?
- What is Freedom?
a)Ability to do whatever you want, within certain limitations imposed by other values
b)Even in nations that claim to protect freedom, does everyone have the same opportunity set?
c)Is there a substantive component to freedom? How should we think about protection of freedom and property rights if we believe these substantive elements are important?
C.Property in One’s Person
- Moore v. Board of Regents of California. (text p. 79, notes p. 24)
a)Court found that there was no property right in Moore’s tissue that was used to develop the cell line, and because there was no property interest, there was no cause of action for conversion
b)What’s at stake?
(1)Chilling effect on research
(2)If my body is not mine, whose is it?
(3)Potential for invasion of privacy and personal autonomy; doctors mining for useful tissue
(4)Moral Issue
c)Who Should Decide?
(1)Legislatures
(2)Courts
(3)Contract
- Bundle of Rights (text p. 99, notes p. 28)
- Property rights are a number of rights bundled together
a)Right to use
b)Right to exclude
c)Right to sell or give away
- Possessing one stick does not necessarily mean you have all of them
a)Cannot use (or sell) your own licenses, prescriptions, right to vote
b)Cannot sell game or animal obtained with specific hunting licenses
c)Cannot give away land or property once you have filed for bankruptcy (must sell at reasonable price)
- Right to include and right to exclude are both necessary to have effective power to transfer
- Jacque v. Steenberg Homes, Inc.: The Jacques had a right to exclude Steenberg Homes, i.e., to disallow them to drive across their land to deliver their mobile homes, even though through the Jacques’ land was the easiest route.
- State v. Shack. (text p. 101, notes p. 29)
a)Right to exclude is not absolute.
b)D’s entered private property to aid migrant farm workers employed and housed there. Having refused to depart upon the demand of the owner, Ds were convicted of trespassing. Ds were acquitted; ownership of real property does not include the right to bar access to governmental services available to migrant workers.
c)Farm owner’s argument: even if you have an interest and concern in providing these services, it’s not my problem. There are other options that accommodate my interest as a property owner w/o interfering with the rights of migrant workers that do not do violence to my property interests.
d)Expectations matter. If you have no reasonable expectation that you can keep people off your property, when they enter it, nothing has been taken from you.
e)Debating the scope of State v. Shack: Where do we draw the line?
- Acquisition by Find (text p. 107-11, 118-25; notes p. 31
- Relativity of Title
a)Finder may have better title than third party, but does not have superior title to owner.
b)Hearkens back to idea that property rights are defined in relation of person to person rather than person to thing
- Lost Property
a)Where an owner unintentionally parted with his property (i.e., has not idea where it might be)
b)Owner has right over finder; finder has right over third party
c)If we had a different rule saying that finder beat true owner?
(1)Incentive to owner to keep better watch over belongings
(a)Spend more time and resources “guarding”
(b)Less time being productive
(c)Decreased incentive to own property
(2)Increases incentive to “find” things
d)Premise Owner’s Right