#11077 - Rationales For Property - Property

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.

1. Examples: cultivation, ideas, discovery

Limits on the labor theory

1. 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.

2. 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.

3. Where there are multiple laborers, the theory does not provide a method to apportion the property.

4. They may be ownership without use, such as natural conservatory

5. 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.

The purpose of law should be to promote flourishing and dignity of the individual.

Personhood spectrum:

1. fetish (care so much of property relationship that it is unhealthy)

2. personal (property essential to your flourishing as individual)

3. fungible (indifferent between that property or cash)

5^th amendment “takings with just compensation” does not privilege personal property. However, some parts of the personhood theory is reflected in law: 3^rd amendment (special protection for private homes against government quartering soldiers) and 13^th amendment (prohibiting involuntary servitude/slavery)

Problems:

1. 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

2. Too anthropocentric – interpreting everything in terms of human experiences and values

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 self-respect) should be of maximal advantage to the least advantaged social class

Problems

1. 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

2. Loss of incentive to produce

3. It’s difficult to define primary goods

4. Conflicting sense of what is just (veil of ignorance)

   1. Assumes we are averse to risk (want to make bottom as attractive as possible in case you end up there)

   2. 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)

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:

1. Whose values count?

   1. 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.

2. How do we measure utility? Critics charge that utilitarian theory is effectively meaningless because it is impossible to assess happiness.

   1. 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

         1. Personhood explanation: we are more attached to what we already have

3. Aggregate utility cannot necessarily justify a wrong. Utilitarianism for some people presents profound moral questions.

Bentham

1. Property is social institution that is means to an end (maximizing social welfare).

2. Property is expectation, relation, claim for enforcement – it is conceptual, metaphysical (not a preexisting natural right)

3. Property and law “born together and die together”

4. Reason for property law: Crucial for incentive to invest (utilitarian – dominant rationale for American property law)

   1. Law = Security = Incentive to invest

   2. Cooperation, reciprocity = law

5. Without law, could only expect to keep what you can hang on to physically

Posner

1. Legal protection of property rights has an economic function – to create incentives to use resources efficiently

2. Three ideal conditions to maximize social utility of private property:

   1. 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

   2. 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)

   3. Universality: all property...