ARTICLE

Perspective: Understanding Property Rights

Private Property Rights Are Key to a Prosperous Society

FEBRUARY 01, 1997 by JANE S. SHAW

This issue of The Freeman focuses on property rights, but not in a heavy, theoretical way. Think of it as a potpourri of information on the subject.

You’ll have a chance to read about how property rights quiet squabbling children, how property rights preserved natural resources for Native Americans, and how property rights are routinely violated by governments, American and foreign.

As Thomas Sowell points out in Knowledge and Decisions, both socialist and free-market countries have property rights. The difference is that in socialist countries the government owns and assigns them. In free-market or capitalist countries, individuals have them and—what is especially important—can transfer them voluntarily through mutual agreement.

My goal is to help us recognize that these private property rights are the foundation of a cooperative society (a point that modern communitarians have yet to discover). But I also want readers to understand that private property rights aren’t always formally described in legal documents. They can be understood rather than spelled out, as property rights are in community-run fishing territories. Ownership can be shared by families or clans, rather than individuals alone.

Property rights can change over time. F.A. Hayek described property rights as a modifiable and very complex bundle whose most effective combinations have not yet been discovered in all areas. Sometimes it’s difficult to have full private property rights, even though we have them nominally. As Richard Stroup notes, even though we have rights against pollution of ourselves or our property, these rights may be difficult to defend.

There’s much to be said about private property rights. I hope that these stories will enhance your understanding of what they achieve for our society and why they should be respected.