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Property Outline Wiener Copy Outline

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Property - Wiener

Contents POLICY, RATIONALES.................................................................................................. 3

1. Rationales for property......................................................................................... 3

1.1 Labor theory - Locke, Second Treatise on Government..................................3

1.2 Personhood theory - Radin.............................................................................3

1.3 Distributive justice - Rawls, Wilson................................................................4

1.4 Utilitarianism - Bentham, Posner....................................................................4

1.5 Autonomy/ Freedom - Charles Reich..............................................................5

1.6 Tragedy of the Commons (Hardin).................................................................5

2. Property and prosperity - Do Utilitarian Property Rights Work?............................6

3. Problems with Private Property............................................................................7

4. Evolution of property rights.................................................................................. 8

5. Evolution of property rights Indians and European Settlers)..............................11

ACQUISITION............................................................................................................ 14

1. Introduction........................................................................................................ 14

2. Wild animals....................................................................................................... 14

3. America.............................................................................................................. 17

4. Oil and water...................................................................................................... 18

5. Intellectual property........................................................................................... 20

5.1 Introduction................................................................................................. 20

5.2 Patent.......................................................................................................... 21

5.3 Copyright..................................................................................................... 22

5.4 News, music, persona, etc...........................................................................24

5.5 Alternatives to Intellectual Property.............................................................25

6. Adverse possession............................................................................................ 26

7. Finders............................................................................................................... 28

FORMS OF OWNERSHIP............................................................................................ 29

1. Present interests - Fee simple, life estates, defeasible fees...............................29

2. Future interest.................................................................................................... 31

3. RAP and Rule against restraints on alienation....................................................32

4. Buying a house................................................................................................... 35 1

5.

Concurrent interests........................................................................................... 35

LANDLORD TENANT LAW.......................................................................................... 39

1. LL's rights and remedy....................................................................................... 39

2. T's rights and remedy........................................................................................ 40

CONFLICTING RIGHTS............................................................................................... 43 Judicial rules............................................................................................................. 43

1. Externalities, Transaction Costs, and Remedies.................................................43

2. Trespass, Nuisance, and Remedies.....................................................................44

Neighbor's rule......................................................................................................... 46

3. Social Norms...................................................................................................... 46

4. Easement........................................................................................................... 48

5. Real Covenant.................................................................................................... 50

6. Equitable servitudes........................................................................................... 53

7. Home owner association.................................................................................... 53

Administrative rule................................................................................................... 54

8. Zoning................................................................................................................ 54

9. Takings............................................................................................................... 56

2 POLICY, RATIONALES

1. Rationales for property

1.1 I.

II. 1.2 I. II.

III. IV.

Labor theory - Locke, Second Treatise on Government Every person owns his body. Thus, each person owns the labor that his body performs. So when a person labors to change something in nature for his benefit, he mixes his labor with the thing, and by this mixing process, he thereby acquires rights in the thing. a. Examples: cultivation, ideas, discovery Limits on the labor theory a. The degree of labor required is uncertain. The theory should permit a person to receive the value that his or her labor adds to a thing, not title to the thing itself. b. It is not clear whether or not we really own ourselves. We cannot sell our organs and we do not have full autonomy. We cannot sell certain types of our labor such as sex. c. Where there are multiple laborers, the theory does not provide a method to apportion the property. d. They may be ownership without use, such as natural conservatory e. Sufficiency condition: labor vests ownership where there is enough, and as good as left in common for others. This condition can only be satisfied if labor enlarges the pie. In this sense the labor theory is similar to utilitarianism. Personhood theory - Radin The purpose of law should be to promote flourishing and dignity of the individual. Personhood spectrum: a. fetish (care so much of property relationship that it is unhealthy) ?
b. personal (property essential to your flourishing as individual) ?
c. fungible (indifferent between that property or cash) 5th amendment "takings with just compensation" does not privilege personal property. However, some parts of the personhood theory is reflected in law: 3rd amendment (special protection for private homes against government quartering soldiers) and 13th amendment (prohibiting involuntary servitude/slavery) Problems: a. The personhood theory is too subjective, it is difficult to measure and prove. A ring could be fungible to someone, personal to others, and fetish to yet some other people b. Too anthropocentric - interpreting everything in terms of human experiences and values

3 1.3 I. II.

III. 1.4 I. II. III. IV.

V. Distributive justice - Rawls, Wilson Focused on community, not individual Maximin principle: maximize the welfare of the least well-off : distribution of "primary goods" (wealth, income, opportunities for work/leisure, and bases of selfrespect) should be of maximal advantage to the least advantaged social class Problems a. Total social value (aggregate welfare) is not always maximized; instead, might be better to take utilitarian approach and partly redistribute the greater aggregate gain to compensate the least well-off b. Loss of incentive to produce c. It's difficult to define primary goods d. Conflicting sense of what is just (veil of ignorance) i. Assumes we are averse to risk (want to make bottom as attractive as possible in case you end up there) ii. However, a just society is one in which inequalities in wealth are acceptable as long as direct correlation to effort and skill (match rewards to contribution) Utilitarianism - Bentham, Posner Focused on community, not individual Society's goal should be greatest happiness for the greatest number - maximize aggregate utility (Bentham) - Democratizing Idea Consequentialist Framework: what is morally good = what produces utility Problems: a. Whose values count?
i. Even if the size of the pie increases, the size of each person's pie does not necessarily increase. Utilitarianism may tend to perpetuate the existing unequal distribution of wealth. b. How do we measure utility? Critics charge that utilitarian theory is effectively meaningless because it is impossible to assess happiness. i. Interpersonal utility comparisons - willingness to pay (WTP)

1. Stated Preference (ask people) or Revealed Preference (observe people)

2. Not true measure of utility (irrational behavior, lack of information about what paying for, WTP conditioned by ability to pay)

3. WTP < WTA (willingness to accept): people feel great utility reduction to lose something. endowment effect; loss aversion a. Personhood explanation: we are more attached to what we already have c. Aggregate utility cannot necessarily justify a wrong. Utilitarianism for some people presents profound moral questions. Bentham a. Property is social institution that is means to an end (maximizing social welfare). 4

VI.

b. Property is expectation, relation, claim for enforcement - it is conceptual, metaphysical (not a preexisting natural right) c. Property and law "born together and die together" d. Reason for property law: Crucial for incentive to invest (utilitarian - dominant rationale for American property law) i. Law = Security = Incentive to invest ii. Cooperation, reciprocity = law e. Without law, could only expect to keep what you can hang on to physically Posner a. Legal protection of property rights has an economic function - to create incentives to use resources efficiently b. Three ideal conditions to maximize social utility of private property: i. Exclusivity: law recognizes the absolute right of an owner to exclude all memebers of society from the use or enjoyment of the owned resources.

1. Without - could "reap where she has not sown"

2. Thus, need as incentive to invest ii. Transferability: property rights are freely transferable, so that a resource can be devoted to the most highly-valued use.

1. Mutual gain (transfer to higher-value user on mutually favorable terms)

2. Conservation (prospect of future sales gives incentive to conserve value of asset for others in future) iii. Universality: all property is owned by someone

1.5 I.

Autonomy/ Freedom - Charles Reich Property rights as a zone of individual autonomy against the society. The ownership of private property is necessary for democratic self-government. Property right provides citizens with the economic security that allows independent political judgment.

1.6 I.

Tragedy of the Commons (Hardin) Commons "open access" yields overuse a. Race to capture - use it or lose it (X users, gain to user of added use = +1, cost to user of added use = -1/X - spread out over all users) b. External costs of depletion imposed on others (X-1)/X - incentive to continue using i. Right to exclude under utilitarianism internalizes these external costs Examples: a. Collapse of a fishery - get benefit of the fish, but loss is spread over all users b. Climate change - atmosphere used as disposal site for greenhouse gases (costs borne by everyone whereas cost of purifying wastes before releasing is borne only by you) Solutions - restricted access

II. III.

5 a. Divide property into private (excludable) spatial parcels (privatizing property): boundaries, fences. Right to exclude internalizes external costs. b. Divide property into private (excludable) use or access rights i. Cap and trade (cap limits the quantity of emissions, permits or allowances get more scarce and price will be set by market conditions), Quotas, Permits ii. ITQs for fish, tradeable development rights in cities, tradeable emission rights for air pollution c. Charge price for access (force people to internalize the externality- amount of tax should be the marginal external harm) i. Tax to recover external harm; Liability ii. Tolls on roads

2. Property and prosperity - Do Utilitarian Property Rights Work?
I. Deacon a. Deforestation - property rights associated with less deforestation (encourage investment, conservation - will not forego current consumption for a future return without some assurance that future benefit will be received by party making sacrifice) II. Acemoglu a. Do property rights encourage prosperity?
i. Two Koreas

1. Same history, culture, geography

2. South - Market economy with property rights

3. North - Socialist, no property rights ii. Europe and its colonies

1. North American colonies rich now because better property rights brought to America a. British better than French, Portuguese, Spanish - decentralization of power in England, but other countries had monarchies with more centralized power. b. North America settled by British (incentive to invest), whereas other countries just had resources extracted. III. De Soto a. Prosperity in developing countries today i. Lots of resources, but no formal system of property rights ii. Cannot borrow against property (no formal right to exclude, transfer, etc.), so cannot finance new enterprise

3. Problems with Private Property I. Privatizing still allows externalities (pollution, biodiversity loss) II. Costs of restricting access 6

a. b. c. d. e.

III. Monitoring, enforcement Lost access itself Coercive power/sovereignty Fairness Utilitarian premise ? use property rights to maximize well-being (don't privatize where costs > benefits) f. Incentives vs. Access i. National parks - charge fees so not overused? Is this unfair to poor people?
ii. Patents on AIDS drugs - enforce? Need incentive for drug makers, but high cost of restricted access when people can't pay g. Communal property can be superior if: i. Resources ? value of wider access, economies of scale, risk pooling/insurance, easy to monitor conduct but not boundaries ii. Culture (Ostrom) ? small size, close-knit repeat players, shared values, sanctions for shirking Tragedy of the Anticommons (Heller) a. Can result when initial endowments are created as disaggregated rights rather than as coherent bundles of rights i. However, anticommons can work in some cases ?restrictive covenants in a residential subdivision (each homeowner holds her unit as private property, but holds veto right to prevent changes at community level) b. Too much privatization, enclosure, yields under-use of resource i. Too many holders of splintered rights ii. Too hard to organize collaboration iii. Blocks sharing of ideas, progress c. Examples i. African Farmers (Tragedy of Enclosure - Monbiot)

1. Common property rights better for farmers in Kenya.

2. Privatizing undermined their "insurance" function (if one piece of land destroyed, still have more)

3. Left to themselves, individuals who are dependent upon commonpool resources for essential inputs to their economic activities will work out a system that achieves regulation over the commons. a. Kenyan farmers (Monbiot) b. Swiss village, Japanese village (Ostrom) ii. Moscow storefronts (Heller)

1. One owner has right to sell, another to receive sale revenue, another to lease...each con block others from using space as storefront...nobody can set up shop without collecting consent of all others iii. Ideas, music (Lange, Boyle, Stiglitz)

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