On Property Rights

From Hernando de Soto’s The Other Path (p. 178 in the hardback edition):

Contrary to the widespread belief in Latin America, the economic importance of property rights is not that they provide assets which benefit their holders exclusively, but that they give their owners an incentive to add value to their resources by investing, innovating, or pooling them productively for the prosperity and progress of the entire community.

Of course Latin America isn’t the only America where this point gets overlooked on a regular basis.

Advertisements

About J@m3z Aitch

J@m3z Aitch is a two-bit college professor who'd rather be canoeing.
This entry was posted in Economical Musings, Uncategorized. Bookmark the permalink.

16 Responses to On Property Rights

  1. Matty says:

    I’ve seen it argued by (I think) the historian Niall Fergusson that the reason north America is richer than the south is that the British pattern of colonisation involved lots of property owners in the form of small farms while the Spanish version involved fewer owners of large estates.

  2. Lance says:

    Don’t you know that social justice can only be achieved when everyone owns everything and no one owns anything?

    Imagine no possessions…. I wonder if you can…

    This from a multimillionaire that owned several Manhattan condos and over 150 million dollars in assets in his estate when he died.

  3. James Hanley says:

    Matty,

    Beyond that, the Brits had a tradition of secure property rights that the Spanish didn’t. Those Spanish estates were grants of the king–privileges–whereas the Brit farmers bought their property or, in many cases, settled freely available land and in consequence of their productive efforts received secure title to it. I think both the elements play a role (and to some extent are hard to disentangle).

  4. Dr X says:

    This from a multimillionaire that owned several Manhattan condos and over 150 million dollars in assets in his estate when he died.

    A naked bread-baker who didn’t see fit see to sharing the wealth of his estate between his two sons, let alone everyone, all the people, who would live as one. McCartney, who hasn’t postured artistically as Jesus Ghandi, still takes very good care of his adopted daughter by his first wife, treating her as most father’s would treat their biological offspring.

    And there’s that widow who is notorious in her fanatical control over the non-tangible property rights conferred by his estate. Communism is good… for all the other people.

  5. James Hanley says:

    Not that Dr. X is bitter and disillusioned or anything… ;)

  6. Dr X says:

    I just always thought John Lennon was going to leave each of us a nice check.

  7. Matty says:

    I just always thought John Lennon was going to leave each of us a nice check.

    You mean you didn’t get yours?

  8. Lance says:

    As a teenager I idolized the Beatles. I still love their music and I sadly accept that they are mere mortals.

    I do wonder what it is about mega wealth and fame that make one profess socialism (for other lesserpeople of course).

  9. Beyond that, the Brits had a tradition of secure property rights that the Spanish didn’t.

    What about the Enclosure Acts, from the 16th century through the early 19th)? I realize the enclosed property was “common” and not secured by title (if I’m not mistaken….I know too little about them), but that seems to show some disrespect for at least traditional property use and tenure (as well as a massive Kelo-style transfer of property to private entitites).

    I do, however, buy the notion that British-style property rights may have been conducive to prosperity in a way that Spanish-style property rights were not. (England did grant trade monopolies at certain points of colonization, but in general I think you’re right.) But one ought not discount the more exterminationist way the British colonizers expropriated the Indians: basically a continual process of forced removal and, sometimes, outright murder (with important exceptions because the colonizers weren’t often powerful enough to do this and relied on allied Indian tribes, and also because Pennsylvania offered a different model). The Spanish, too, were brutal, murderous, and expropriating, but they seemed to prefer enslaving and creating caste-style feudal systems.

    My point is there’s a paradox to all this: the British-style property regime was more secure and better assured prosperity than the Spanish-style regime, but the British regime could be put in place only because it systematically destroyed the native property regime. (I must admit, however, that I’ve never read de Soto’s book, so maybe he covers (or disproves) what I’m saying here.)

  10. Correction: I said “systematically destroyed the native property regime.” I’m not sure that it was so systematic. But in my view it followed a logic that was more peculiar to the English style of colonization than it was to the Spanish or the French styles.

  11. James Hanley says:

    Pierre,

    Good points. The commons were technically the property of the gentry, and that in itself dated from a feudal period more akin to the Spanish system than what I was thinking of as the British system. From Hernando De Soto’s perspective it would certainly be significant that the native property regime within the commons was what he would call an “informal” system, where there was a certain amount of right inherent in usage, but not a secure right because of lack of title.

    So indeed the British system had more complexity, with more “non-Britishy” elements (if I may), than expressed in my prior comment. Thanks for catching that.

  12. Matty says:

    The Spanish, too, were brutal, murderous, and expropriating, but they seemed to prefer enslaving and creating caste-style feudal systems.

    I thought that was more because the local population was significantly higher and the colonist population lower in South America than the north making full scale replacement impractical. As I recall where Spanish colonists did face lower numbers of native people in parts of Argentina and Chile there were the kind of removals done in the British colonies.

    I might also be relevant that while the basic laws of land ownership were copied from England to the colonies, and I assume kept after independence, the pattern of ownership was not, England remained feudal in some ways up to the industrial revolution (and in other ways still is). The colonial pattern of as many people as possible owning their own farm seems to reflect what 16th-18th Century English wanted given a blank canvas rather than what they were used to given the constraints of history.

  13. Matty:

    I find very little to disagree with in what you say.

  14. James Hanley says:

    Matty,

    You’re probably right, but also the Spanish had a missionary approach that the British did not. They wanted to convert the natives and save their souls. Not that they were above killing them ruthlessly and sending them to hell, but they did have something else in mind alongside that kind of nastiness.

  15. Matty says:

    Agreed, but I’m starting to see that we could run up quite a list of diferences without identifying their actual effects. Just one more example, the process where a group could get a charter to set up a British colony had less central control than the Spanish system where every official was appointed from Madrid. It is hard to imagine for instance that William Penn would have been allowed to set up a community of heretics in New Spain.

  16. James Hanley says:

    It is hard to imagine for instance that William Penn would have been allowed to set up a community of heretics in New Spain.

    One can only imagine how different Latin American history might be.

Comments are closed.