Friday, October 19, 2012

Property Rights for Beginners Like Me


On your way back home you saw on the dirt a lustrous pebble. You picked it up and called it your own. Supposed another man saw what you got and said he wants that pebble too, you wouldn't give it up for nothing. You found it first, therefore you feel you own it. The other man might acknowledge your assertion and he will leave you alone with a pebble you call your own. Or insist on his demand that he owns the pebble and might beat you to a pulp just to get it from you and then, as you did, call it his own.

The dispute over the pebble can be solved by laws of property rights. It is a convention to materialize on paper the ownership of a property or economic goods. PR is a legalized assertion of possession of anything just to avoid protracted disputes over property ownership and disposal. 

Why disputes occur by the way? The short answer is that economic goods are scarce. If only there were two lustrous pebbles, the dispute would be less likely to happen. Property rights therefor exists to settle the issue of ownership over scarce economic goods. The air we breath is not scarce, so property right issues would not naturally arise. However, if such air comes in forms of purified air in a specialized packaging for special purposes, the manufacturer has the property right over those scarce packaged purified air. 

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