6. What is “ownership”?
Ownership is a concept closely related to property. It is the legally recognized and enforceable rights that a person has to property. This concept is important because it is possible to possess property and not own it. For example, you find a valuable item on the side of the road and you cannot determine the owner. You possess the property, but you do not own it. Likewise, it is possible to own property and not possess it. Think of a situation in which you lend one of your physical possessions to a neighbor. Your neighbor has possession of the property, but you retain ownership. Ownership of property (or the bundle of rights that is property) is a form or legally provided assurance. The legal system affords the owner a claim of right that cannot be infringed upon by others without violating the law. Violating or infringing upon one’s property rights allows the property owner to use legal channels to enforce her rights (e.g., the police or court system).
• Note: Within the legal system, property is often classified based upon who owns it. For example, property may be “public property” (resources owned by the government) or “private property” (resources owned by an individual or entity). This classification will be important later when discussing the extent of property rights.
• Discussion: What would you do if someone were to break into your house and take some of your physical assets? Most people answer, “I would call the police”. This is an example of using the legal system to enforce your property rights. The law allows for the ownership of those rights. Now, what would you do if someone borrows and alters a piece of machinery that you own and it no longer works? What would you do if you wish to sell one of your physical assets, but the sale falls through because someone has erroneously filed a notice of lien (ownership interest) indicating that they have ownership rights to the property? What would you do if someone distributed pictures of you to advertise her product or began earning money by playing a song you wrote? Each of these questions offers unique situations where the legal system recognizes your ownership and protects your property rights.