Glenn FoxProfessor

Department of Food, Agricultural and Resource EconomicsUniversity of Guelph

Presentation at the 10th annual CIVITAS National Conference

Ottawa, OntarioMay 6, 2006

Competing Theories of Property Rights: Which one deserves

protection?

From a recent open letter to the premier of Ontario from Daniel Thomey, Port Hope, Ontario

“The Patents granted by the King of England as early as 1797 in the County of Northhumberland specifically states that the described ‘land, woods and waters are the property of the landowner “forever’”. . deeds give ownership to the lands, ‘together with all woods, water ways and water courses thereon laying’”

To a more recent case reported in Ontario Farmer

“His family has owned their beef and maple syrup farm near the Ontario border since 1820, but when the town wanted water from under their farm for virtually no money, ‘we couldn’t do nothing about it’ said Bennett. ‘I always thought that we owned it, but the government does’”

How did we get here from there?

• Ideas have consequences• A Brief History of Property Rights Theories

– Classical Liberalism (1700’s to late 1800’s)– The Progressive Movement (1880 to 1937?)

• Utilitarianism• Pragmatism• Legal Positivism

– The Modern Libertarian Movement (1970+?)

How did we get here from there?

– The theory of property rights that existed in the 1700’s, when the County of Northhumberland deeds were written, is fundamentally different from the theories that emerged in the late 1800’s

– Today, we have several competing theories of rights

– Is it any wonder we are confused?

Classical Liberalism

Locke, Madison, Jefferson– Self-ownership and homesteading, consent as

a requirement for transfer of property– The primary function of the state is to protect

life, liberty and property– Rights are not transitory

Utilitarianism

Jeremy Bentham, Ronald Coase, most contemporary economists, sustainable development, John Rawls, Richard Epstein– The greatest good for the greatest number of people– Rights, including property rights, are transitory

• Efficiency trumps rights

– Legislatures and courts determine what is efficient, and, when transaction costs are high, re-allocate property to higher valued uses

Pragmatism

Oliver Wendell Holmes, Richard Posner, our own chief justice– Post U.S. civil war ideology– General normative rules caused the civil war– “Therefore let there be no general normative rules”

• Except this one, of course

– Decide each case on its own merits– Rights, including property rights, are transitory

• In any particular case, circumstances may warrant a re-allocation of property

Legal Positivism

Post WWII development – as law followed the social sciences in mimicking the natural sciences– Competition in the political process is like

competition in the market process– The political process reveals the general will– Rights, including property rights, are transitory

and determined by the legislature

Modern Libertarians

Rand, Rothbard, Nozick, Narveson– Rehabilitation of classical liberal theory

• Extend and adapt to contemporary issues

– Self-ownership, homesteading, consent as a requirement for transfer of property

– Rejection of utilitarianism, pragmatism and legal positivism

– Rights are not transitory

Implications

• There are at least five major theories of property rights in circulation today

• Key concepts are used quite differently in the competing theories

• The theories are incompatible• Most writers seem to be unaware that different

theories exist– This makes for misunderstanding and conflict– What does it mean to say “We want to protect

property rights”?

More Implications

• It is time to have a rigorous and civil comparative debate about these theories

• We need to learn to recognize them when we encounter them in the wild

• Canada does not have a well established intellectual tradition in this area

• Until we have this debate, I don’ t think we will be able to do much to make property rights more secure