The Foundations of Property
Property is a concept at once so simple that a 4-year-old can grasp it, yet so complex that the greatest legal minds have not been able to formally settle on a definition.
Law students are presented with the classic case of Pierson v. Post to illustrate how a dispute over the rightful owner of a fox carcass cannot be settled without surveying a whole host of historical legal treatises.
Pinning Down Property
Bart J. Wilson is a Professor of Economics and Law and the Donald P. Kennedy Endowed Chair in Economics and Law at Chapman University, where he co-founded the Smith Institute for Political Economy and Philosophy, for which he serves as the director.
His economic research aims to better understand humans as we interact with each other and our environment — especially with respect to things that can be considered as “yours” and “mine,” i.e., private property.
His new book, The Property Species: Mine, Yours, and the Human Mind, is one of the most comprehensive studies ever undertaken of how we come to own stuff, and from whence this essential concept arises.
TRANSCRIPT
Last Sunday, I spent an hour with a wonderful guest, John Judis, and we compared socialism to a free market economy. During that show, I discovered one of the core fault lines between those who favor socialism versus a free market economy: the respect for the importance of private property.
Capitalism depends upon a vigorous defense of the morality of private property. If one acquires property lawfully — without fraud or coercion or force — then that owner has the moral right to retain it, and exclude others from its use and enjoyment.
In a socialist society, private property’s importance is diminished. There’s less belief that what’s mine is mine and what’s yours is yours. John challenged me on the show, asking “Bob, you say it is moral for one to be able to retain exclusive use of property, which was lawfully acquired. Where is that written? What is the morality underlying that?”
Frankly, I had some difficulty in defending the morality of property. Why was that more moral than shared property, or where nobody owns anything?
As a matter of serendipitous good fortune, this morning’s guest can help us understand at its core, the concept of property. I only had to worry about this issue for a couple of days. Professor Bart Wilson has just published, The Property Species: Mine, Yours and the Human Mind — a gift to Bob, a gift to all of us — to help us understand the anthropological roots of property.
Is it primal? Is it inherent in our collective DNA or is it taught? Does it have to be enforced or is it natural? What are the benefits of property?
Bart, welcome to the show this morning.
Thank you for having me. Glad to be here.
Observing the Origins of Property in the Laboratory
Your book is The Property Species. You have taught at Chapman University at the Fowler School of Law. You founded with Vernon Smith the Smith Institute for Political Economy and Philosophy. Your disciplines span law, economics, anthropology, and philosophy.
Your book relies for its data on experimental economics — a concept that many of us may not be familiar with. Tell us conceptually what the thesis is of your book, and along the way, explain what experimental economics is all about.
I am an experimental economist, which is a way of studying my own priors as an economist and how I think economics works by using the laboratory. We bring undergraduates into our computer laboratory and create virtual worlds for them to participate in. They can be market worlds or free-ranging worlds. They could be worlds looking at trust and accounting and things like that. Then we pay the participants to make decisions. We want to see what kind of decisions they make, and see if what we think is true is what they do. The better decisions they make, the more money they earn.
Part of this research project was to see how markets grow from the ground up and to see what happens if we don’t have anyone enforcing ownership over things. We created a world where people could discover that they could trade stuff, and they could discover that they can move stuff to and from each other. What we found was stuff flying all over the screen. It was very unstable. We were rather surprised by this, because we’ve discovered in experimental economics that when people try to sell above their costs and try to buy below their values, that this market is highly efficient. Without any real training, people find ways to get the gains and trade out of the system. In this world we had created, things were really miserable.
That pushed me back to thinking, “What are the foundations of what we call property rights?” I started reading David Hume and John Locke. I noticed that they didn’t use the word property rights. They use the word property. They say these phrases like “they have property in X.” That got me interested in wondering what is property? How does it work?
I work with people both in humanities colleges and in biology. My friends in biology would say, “All sorts of animals have property.” Baboons respect harems. The males in the harems don’t go after the females and other groups. Chimpanzees seem to patrol their territories. Wolves patrol their territories. Birds even protect their caches of food from theft by rehiding them when another bird is watching them, whether hiding it.
My friends in the humanities would say, “Property is this Western European construction” — a male-dominated thing that’s imposed on the world.
One part of campus has the idea that property is all over the animal kingdom. Another part of campus says that some people on the planet have it. I thought both of those, and my intuitions were wrong.
That’s what I set out to study and came to this conclusion that property is a universal and uniquely human custom. All human groups have property in some small set of things — like tools, utensils, and ornaments — but only human beings have property in tools, utensils, and ornaments, and things. That is my way of going down the middle of making nobody happy.
My friends in the humanities would say, “Property is this Western European construction” — a male-dominated thing that’s imposed on the world.
The Evolution of Property Customs and Laws
Property first evolves as a custom, then later as society develops, gets embodied in law and statutes, and enforced by government. The government will support one’s claim to property. As we learn when we study biology, anthropology, the law, property and other customs develop in order to make things better. As humanity evolves, it learns and discovers how to make life better.
What was the need that was filled by the invention of the concept of property? How did property per se make things better?
Imagine that there’s this thing in the world — a tool, a spear. If two people want to use that spear, but only one person can use it, you now have the potential for conflict. You have to decide who gets to use the thing. One person makes a claim on it, and the other person also makes a claim on it, you have this potential for violence. They’re going to fight over it. Even worse, in the human species is that we’re groupish. Both you and I want this same spear, I’m going to bring my buddies to it. If you’re going to take it from me, and you’re gonna bring your buddies to it, we’re going to potentially have a real problem with violence because once it gets going, it doesn’t temper. That’s the real problem that needs to be solved.
Can we find a way that says that you’re not going after some things, and I’m not going after other things?
The concept of property is really a concept of conflict avoidance. With property rights, that conflict isn’t eliminated, but the prospect of conflict and the things to fight over is diminished. Clearly, society is better with less conflict. Therefore, the rule of property simply makes things more civilized. There’s less fighting. Everybody becomes more productive. Is that overly simplistic or reasonably accurate?
That’s the core of it. It could be just keeping relations within your little community. The big question is how can you then export that broader way to more and more groups and things like that? Groups who don’t know each other personally also respect those things that people call their own. That’s one of the whole real problems of getting this off the ground.
Yours and Mine: Is Property Learned or Innate?
Does property have to be taught? You do a lot of work in your book about the concept of “it’s mine,” and how that influences the behavior of very young children. I’m asking the question to see if strong property rights are the more natural, automatic, default way that people are. Help us understand childhood development and the concept of property to see which in your opinion, is more natural.
I’m going to come down in the middle and say it’s some of both. It has to have an element of both. The common part, the part that is born into us, is that we have the DNA for a brain that creates the “mine”.
In every human language, you can say this thing is mine.
You can’t break down this thing — mine — into any simpler concept. That makes it possible for two human beings on the planet to communicate with each other. If you can figure out what those lexical exponents are in each of the different languages, you can map that out. That’s the innate part.
However, human beings are social and with our DNA, every human group has those concepts. But how you use them and how you apply them have to be taught. No kid has to be taught to claim something as mine. That’s not really the abstract concept of mine. That is the abstract way of thinking of I want this, which is what all animals have in a sense. They’re always going after food, making their territory. In some way, they want something. Kids want something and they hear this word, “mine,” they call it and they grab it. It isn’t really mine until they’re taught when they can say that, what are the circumstances under which they can do that?
It becomes property when [kids] understand what “yours” means.
Yours is very simple. You can say about this thing, “it is mine.” Once the kid is taught to say, mine and yours, then you have the social parts that are taught within a community starting. That’s why it might vary from group to group around the planet. There are different things by which people can call mine in different communities. They’re taught that from their elders.
To give you a sense of what is natural and innate and what is taught: I remember at one point, going to the grocery store for the first time and walking in and saying, “Whoa, look at all these great things around here.” The first thing you want to do is grab that lollipop. It’s just there. If you’re out on the playground, and you see things, you can just grab them. Why not just grab the lollipop? You don’t have to be taught to grab things and claim them when you grab them and find them. Your parents don’t let you get away with that. That’s not yours. You might call it mine, but you have to learn that until you exchange something for it, it’s not yours.
That’s the part that has to be taught — those kinds of rules about what you can make as claims. Then you use those innate ideas of mine: you can say, “This is mine,” and put them together in situations that create the whole custom of property. It comes from both who we are as a species, and also who we are as a community, as taught by our mentors.
In every human language, you can say this thing is mine.
It becomes property when [kids] understand what “yours” means.
Respect for Private Property Across Societies
I guess private property and property are the same thing. Private doesn’t add anything. There are some societies that have always existed with a diminished effect of private property. More property is owned in the commons. It’s owned by everybody for everybody’s enjoyment. The commons was a phrase in those societies, which means pasture land that anybody can use to the extent they want.
In what ways has life in those societies been better with a diminished respect for private property, as compared with societies with a more refined and stronger respect for private properties?
In some hunter gatherer societies, if you create a tool yourself, that is just going to be something you can call “mine.” If you have to work with somebody else and build the canoe together, no one can say that canoe is mine. It depends on the customs of how they go about living their lives and meeting their needs. You’ll come up with the things that you need to come to “mine” and what you don’t need to call mine.
The thing about the concept of mine and mine and yours is that it is abstract. I argue that toolmaking is the source of the notion of a property. We tend to think, in the modern world, it comes with land and territory. I think all of that is very late in human history, compared to the creation of tools and these very unique and complex tools relative to the rest of the animal kingdom. The idea is abstract.
Some communities then start applying these notions of property more broadly and around for different things. If your community is built upon migratory hunting, you follow the prey around. Then you’re not going to have notions of calling land mine. If you become agrarian, then you have to try to solve these other problems like Western Europe. They might say, “Alright, now we’re going to call not just tools mine, but these plots of land, mine.”
This can continue. Now, in the modern Western world, we call ideas “mine.” There’s some problems with that. They don’t have nice boundaries like land or like tools, but we still say this idea is mine. That allows and creates a broader scope for us to trade things, and to create things and therefore setting in motion the last 300 years of the great fact of wealth creation here that in the world.
Having grown up in a society with a very strong respect for private property, it seems to us that it is a natural way to behave to own things and for them to be yours, as long as you have acquired them without force or coercion or fraud. However, when society awards the owner of private property, it is also denying everybody else the use of that private property. For example, a billionaire who owns beautiful, pristine beachfront property owns it to the exclusion of everybody else on Earth, who is denied access to that beautiful property. There is a societal downside to a respect for private property.
In total, on the scorecard, what benefits and detriments are there in comparing two societies, one with diminished respect for private property, a more socialist economic system, as opposed to one with very protective rights on private property. Can you generalize about how each society is better than the other and is worse than the other in the long term?
Yes, in the sense that [we can ask] what’s the alternative of having kind of a greater respect for property? The alternative is that we are going to have multiple people trying to use the same thing, in which case, we’re going to degrade the resource itself throughout the conflict. That’s the alternative. If that’s what we have, then we’re going to be poor. If we’re spending time trying to protect ourselves because people are trying to encroach on what I call “mine,” as opposed to being productive, the entire community is going to be worse off.
Property gives us this notion that we’re not thinking about having to defend it, and the more we have to spend time defending it.
Does one economic system that is breaking down economic systems have more respect or less respect for private property? Is one more violence-inducing than the other? Can we say that to the extent that you have diminished emphasis on private property, that will — for that reason alone — invite more violence and dispute? Or is the opposite true?
It depends on how much of a monopoly on violence the state or the government has at the time. The general idea is that the less violence you have, the less you have to worry about violence, the more you have to worry about strangers coming up and saying, “No, that’s mine. I want to use that too.”
The Importance of Trade
This is Bob Zadek. I’m spending a wonderful hour talking with Bart Wilson. Bart has written The Property Species: Mine, Yours and the Human Mind where he has developed a wonderful line of scholarship through the use of experimental economics to discover how people acquire and behave with and without strongly developed roles of private property. We learn from the book that private property seems to be the core of conflict avoidance. We’ve learned that private property is really a dispute-resolution device. It resolves all kinds of issues that would otherwise have to be resolved by force. It creates a system where it works for the common good, even though some of our species might be denied access to places and things that they would have access to in a society with diminished respect for private property.
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Property provides an opportunity to trade. You help us understand the importance of trade. In economic growth, it’s almost too obvious to explain. Many people, when they think about this stuff, don’t relate the two, and don’t understand the opportunity trade provides for all of us. Your experiments in your book point this out. Share what you have learned with us.
I want to credit Matt Ridley, who reoriented my mind as an economist. As a biologist, he had made the point which Adam Smith made, that no other animal trades one thing for another thing.
That notion of exchange is something that differentiates our species and makes what we see around us in the modern world possible — we’re the only species that is decreasing our infant mortality, the only species that is extending our own lives, the only species that’s making their lives more comfortable than they were.
Something has to be different about what we do. Matt Ridley identified that and wrote a report called The Rational Optimist based upon that notion of exchange.
There’s something else that has to make exchange possible. Why is it that humans are the only species to do this? I argue that it has to come from this abstract ability of ours to call something “mine” and put that kind of notion of mine inside the very thing itself. You can imagine how this might get off the ground if you and I have the ability to think about another person’s “mine” and to think about why the world might be different in the future.
I work with a primatologist at Georgia State — Sarah Brosnan. She has worked really hard to try to get chimpanzees to trade stuff. They know what stuff they like more. They give it to the other animal. They’re trying to get them to exchange things because they can’t get their mind out of right here right now. Abstract thought gets us out of the here and now, and we can think and imagine the future — trade will happen in the future. That is, if I have a cow, and you have some chickens, I can imagine a future where I give you a cow and you give me a whole bunch of chickens.
That means that I had to think like, “Oh, this cow is mine but I want those chickens to be mine. You want this cow to be yours. You are willing to let those chickens be mine.” That requires us thinking about a future where the things have switched and the way we categorize them and classify them has switched. That’s why one species on the planet does this and not many others do.
We created these laboratory worlds to see what it took for communities and these undergraduates recruited to our computer laboratory to get that off the ground and going. In the first version of the experiment, we gave people a little bit of a place where they could grow things and a place where they could consume them in a house. Then they produce the things. They can move the things around. They could talk about it. The first thing of course, when people discover things can be moved to them as they can move, just like two year olds, everything goes to their own hand. Mine mine mine. They grab them, and things are flying around. There’s no incentive for you to spend more time and specialize in the stuff that you’re good at producing. No one does that. The world is poor. Things are flying around, and people are unhappy. Participants are chatting back and forth. If that’s the way it stays, people leave after an hour and a half of work with about $7. They’re not very happy.
If they can discover that, “Oh, if you call those things in your fields, “yours”, and I’ll call these “mine,” and then we decide how much to move to each other,” then they can spend time not thinking about where to get anything they can get their hands on.
Once they decide who can call things mine, and what those things are, then they can spend time being productive, and figuring out how to trade them to maximize the gains from trade.
Once they figured out all that trading in our experiments, they can make a rate of $35 an hour — they’re doing five times better because they’re spending time working out how to be productive, and then finding someone to trade that stuff with others. That is the heart of the problem that humans are trying to figure out. How is it that we can get the most out of what we have right here most in terms of our time to produce stuff and the most and be able to find a way to distribute that and exchange it in the most efficient way possible? If we’re spending time on all that, we’re not spending time thinking about protecting ourselves from being preyed upon.
That notion of exchange is something that differentiates our species and makes what we see around us in the modern world possible — we’re the only species that is decreasing our infant mortality, the only species that is extending our own lives, the only species that’s making their lives more comfortable than they were.
Once they decide who can call things mine, and what those things are, then they can spend time being productive, and figuring out how to trade them to maximize the gains from trade.
Beyond Self-Sufficiency
Once you develop the concept of private property, that automatically invites the concept of comparative advantage that each individual doesn’t have to be wholly self-sufficient. They don’t have to worry about not being good at gathering food because they are good at preserving it or preparing it or something else.
Once you establish private property, then as an individual, I am free to do what I do best in my creation of my property, which has value to somebody else who will respect my rights in the property that gives me something to share, to sell, which is my interest in property. I can then trade that for your interest in your property which I need for my survival. Thus, each of us gets to do what we do best, only because there are private property rights. Then once everybody is doing what they do best, the economy as a whole is profoundly more efficient. That gives birth to comparative advantage, which then gives birth to collective benefit.
The concept of property says, “No need to fight — no need for the fittest to prevail because they have the greatest strength or the greatest weapons. All you need is a property system.”
The property system protects you against not being the fittest — the one with the most brawn or the one with the most weapons. The property system is what allows you to create and incentivizes you to create because what you create will be protected. That is especially true in the abstract concept of intellectual property.
There’s no incentive to be creative if all of your efforts are simply for the common good. Once again, firmly established rights — in this case in intellectual property — is the only incentive for somebody to be creative: to invent the newest best thing for society. It’s the gift of property rights that is the only incentive possible for one to produce.
Yes, it requires mutual respect. If I claim something as mine — land an idea — I’m relying on you to respect and understand the concept of “yours.” The core is that we are all mutually respecting these boundaries. For intellectual property, the problem is the boundaries aren’t as clear. If it’s a thing, it starts at the border of the thing. Ideas don’t have the same borders. That’s what makes it a lot trickier.
Distinguishing Law and Custom
You use the phrase custom. There’s a morality factor as well as a legal factor. Distinguish custom and law, as you use the phrase.
We have to be taught by someone that we will respect their authority and that they know what they’re doing, and what they’re teaching us is valuable to us. That starts with parents and kids. When they are three years old, that’s when we start teaching property. It’s customary because kids aren’t born with it. It has to come from the prior generation.
When communities get bigger, and we want to keep people who don’t know each other connected, we create these top down versions to do the enforcement.
I use that word custom because one of its meanings is that it has the force of what is right. If I make a claim that “this is mine,” that’s not just a factual claim — It’s a moral claim. That doesn’t have to carry the same moral force. If I’m claiming this is mine, I’m also claiming that it’s not yours. If you’re trying to go for it, there’s going to be a moral problem. We’re going to create violence.
In my first trip down to Argentina. I couldn’t believe that they were putting plastic around the suitcases. The way the airport system broke down, you couldn’t trust your luggage wouldn’t be gone through. Whereas that would never happen in the United States. I never saw a place where they put plastic around it to ensure that it’s going to be shipped out. It’s that kind of custom.
Economic Video Games
When you were describing the experiments you had your students help you with in the lab, it sounded like students were getting three credits for playing economic video games, where instead of having fancy weapons on the screen, they had wallets or credit cards.
In your experimentation, you were performing experiments to see what you could learn. Obviously, as somebody as knowledgeable as you are in economics and the law, you had in the back of your brain what you assumed would be the result. Were there any surprises in the experiment?
In general, it’s not a good project if I know what’s going to happen. In fact, I have to have a little bit of doubt for it to be a real science experiment. I’ve always been surprised about something.
The original experiments that we started, we were expecting a fantastic amount of trade and exchange specialization. We expected that because we’ve seen it in other environments in the laboratory. Where we give people really strong rules — like Chicago Board of Trade — and you give them stuff and say, “Alright, here your costs. Here are your values. Here are the rules of the Chicago Board of Trade. Now go out and trade.” We run it with fourth graders, and they’re very good at it. The rules of the Chicago Board of Trade facilitate exchange so quickly that even fourth graders can take all the gains from trade home with them.
It was that kind of interest that was like, “Okay, let’s see if people have to build it up with their own personal relationships.” We were surprised at how difficult it was, because you have to find the right person, you have to trust that person, then you have to work out the deal. If you don’t have enforcement of what you can call mining yards, you don’t even get that off the ground. What we found was how difficult it was to get bilateral trade turning multilateral and then building in a respect for mining yards on top of it. That is really special in our experiment.
You have done wonderful work with your experiments in sending out participants into a free market economy to appreciate the effect of the free market on the accumulation of wealth. Your book, The Property Species: Mine, Yours and the Human Mind, encourages me tremendously, as I learned that free markets are the natural order of things the government has to teach it out of people rather than teach it into people. Bart, thank you very much for your work, your book, and for being such a wonderful guest on the show this morning.
LINKS:
- AMAZON: The Property Species: Mine, Yours, and the Human Mind, August 1, 2020
- Bart J. Wilson (@bartwilson) / Twitter
- About — Bart J. Wilson
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