RE: Property Rights

Billy Brown (
Tue, 25 May 1999 12:07:29 -0500 wrote:
> What about water? That is something which people do care very much about,
> especially here in southern California. Tremendous fortunes have been
> won and lost fighting over water. But what the fight is over are water
> rights, an abstract form of property which involves the right to draw a
> certain amount of water at certain times of year. No one tries to keep
> track of individual parcels of water simply because it is impractical
> due to its fluid nature.

You seem to be using a very limited definition of 'private property'. Water rights can be a form of private property. So can broadcasting rights, intellectual property, stock options, futures contracts, and many other abstract constructs.

The key feature of private property is that it allows individuals to decide what is done with a resource. Any system in which individuals are allowed to freely own and trade a resource is a private property system.

BTW - I've seen pretty convincing evidence that most of the water problems in Southern California could be alleviated simply by creating real water rights. The major problem right now is that no one is allowed to buy or sell their water rights without a special OK from the government, which means that water must be allocated by bureaucratic decree. Replace the water regulation boards with a water rights market, and water use would become both more efficient and more closely aligned with the desires of the people using it.

> It's surprising that you should say this, when here and now we are engaged
> in a voluntary collective enterprise, in our participation on this mailing
> list. A very small group, yes, in a way; some dozens of active posters,
> probably a few hundred who listen in. But strong social bonds? Hardly.
> Most of us have never met, and when people disappear from the list,
> few people even notice.
> Why do you contribute here? Who pays you for your time and energy? Your
> contributions are valuable, and I think many of us have profited by your
> insights. What do we offer in return? Only our own thoughts and ideas,
> which hopefully will be of some value to you. There is no quid pro quo
> here; nobody is keeping score.

When was the last time this list made a decision about anything? It is a recreational activity that makes no decisions, allocates no resources, and produces nothing of monetary value. Of course we don't need property rights or a formal market to make it work - we aren't doing any of the things that those institutions are designed to facilitate.

Again, having a private property system does not mean that all human activities must be mediated by property rights and markets. It simply means that individuals are free to use such methods wherever they wish to do so. I can give away my thoughts if I wish to do so, or I can try to convince people to pay for them. As long as I am the one who makes the decision, our system is based on private property.

The collectivist alternative would be to have someone else decide how we run the list. The socialist middle ground would be to leave some decisions to us, and have others (usually the 'more important' ones) made by others.

> I don't know if this is anthropologically accurate, but it does seem
> that it could apply to an island (space station/asteroid) culture of
> the future. Self-contained, self-sufficient, relatively small, with
> the technology and resources to meet all the basic physical needs of
> food, shelter, etc. Individuals who are unhappy with such a society
> could leave and strike off on their own. In such a situation people
> could focus their attention on other goals than acquiring property.
> There would be no need for property rights in most cases. Conflicts would
> be resolved socially. Productive people would be rewarded by the respect
> and admiration of others.

If you want to make a serious proposal out of this, you need to address the following questions:

  1. Who decides how the resources of the group are used? This covers everything from where the station is set up to what kind of icing goes on the desert cakes.
  2. Who decides what personal resources each member of the group will enjoy? Obviously, this is closely related to #1.
  3. What happens when someone wants something the above mechanisms don't allow them to have? Don't tell me it won't happen - the only way to prevent it is to have infinite resources, and even nanotech can't give you that.
  4. If a new member joins the group, what happens to their property?
  5. If someone leaves the group, what do they get to take with them?

Until you address these issues, we don't have a concrete enough proposal to examine in any realistic fashion.

> Another way in which the future could be more cooperative would be
> by using computers to mediate decision making. Again, keep in mind
> that this would be done in the context of a voluntary community where
> everyone has agreed to use and be bound by this mechanism. One problem
> with collective control in the past has been corruption and greed on
> the part of those entrusted with control. Today it would be possible
> to use computer networks to allow democracy at a much larger scale than
> in the past. Online voting, especially combined with modern economic
> protocols like preference voting and auction based systems, can allow for
> group decision making without the possibility of corrupt rulers, because
> there are no rulers to corrupt. The effect of these technologies is to
> raise the threshold for community size in which cooperative relationships
> can be effective.

I refer you to the same list of questions. If you answer a question with "The computers decide.", then you need to explain who programs the computers and how they make their decisions.

> We have the computing power to model the economy at a much finer scale
> than in the past. If it was just a matter of running an economy, making
> routine decisions, responding to shortages, allocating resources, we could
> probably do a good job with the computing resources which exist today.
> There are only 6 billion people in the world, and most people are
> price takers, so the task any one of them faces is not that difficult.
> If 6 billion people *voluntarily* decided to set up an economic system
> which used computers to allocate resources rather than property rights,
> I don't think it is true any longer that the computers would not be
> up to the job, although it would have been true in the past. And with
> computer power increasing exponentially, the argument against central
> planning based on lack of computer resources becomes ever weaker.

Even the most socialist of economists would not make this claim, and for good reasons. It is not even remotely feasible to model a modern economy with existing computer systems - the volume of data that you would have to process is far larger than even the most massive computer system could hope to handle. I can go into detail if you want.

But beyond that, building a computer that can model your own economy is a self-contradictory goal. Remember, those same computers are part of the economy you want to model - they trade stock, process orders, manage factories, and so on. As our computers improve we find more complicated ways to use them, which makes the economy more complex and more difficult to model.

Also, sheer computer power is not the main obstacle. The biggest problem is that you need information that can't be collected. In order to make the best possible decisions about how to allocate resources, you would have to know the preferences of every human being in the economy. Otherwise you end up making what the central committee wants, which rarely has anything to do with the actual desires of the people. (And please note that simply voting isn't good enough - just because 60% of the population prefers chocolate ice cream does not mean we should stop producing the other flavors.)

> What about Natural Law? Is it "evil" not to create a market in these
> situations? (This comment is directed at those who believe in such
> things.)

Of course not. Only the most rabid of cranks would make that claim - it certainly isn't something that your average libertarian (or even your average anarcho-capitalist) would agree with.

The basis of a market system is the idea that individuals should be allowed to set up whatever arrangements they find mutually agreeable. In most cases they will choose to stick with property and markets, but if a group decides to pool their property into some kind of communal arrangement that is perfectly OK.

What some of us consider "evil" is when some outside agency gains the power to dictate to individuals how they must handle their affairs.

> Russia is mired in corruption. They have not succeeded any better with
> markets than without them. You can't build a society out of people who
> believe that the only way to survive is by breaking the rules.

I was referring to Russia under communism.

Billy Brown, MCSE+I