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Justification for Recognizing Property Rights

Cite this article as: Jason Mance Gordon, "Justification for Recognizing Property Rights," in The Business Professor, updated January 1, 2015, last accessed April 2, 2020, https://thebusinessprofessor.com/knowledge-base/justification-for-recognizing-property-rights/.
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Why does the Government Recognize Individual Property Rights?
Why does the Government Recognize Individual Property Rights?

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Why would a system establish ownership of property rights?

There are numerous theories regarding the reason or justification for the legal system recognizing property ownership rights. Some theories adopt a pessimistic view of human nature and the intentions of those to exclude others from their resources. Other less cynical theories attribute ownership rights with incentivizing individuals to undertake activities that benefit society at large. That is, ownership of property incentivizes individuals to increase productivity and create new resources, which ultimately benefits society.

Discussion: These theories underlie two contrasting, yet common, forms of government: Communism and Capitalism. Communism centralizes control of property in the governing body. For example, Cuba is a communist state that is familiar to most Americans. In Cuba, the government retains membership of land and industry. How do you think this forms of government affects individual and business productivity? The United States, in contrast, is a capitalist system that seeks to promote or incentivize private wealth among individuals. How do you think this form of government affects individual and business productivity? Take some time to think about these two forms of government and how their concept of property ownership differs.

Discussion Input

  • Communism is a form of government in which the government reserves the sole rights to retain the ownership of land and other sectors such as industry. In terms of productivity, this form of government is often criticized due to its inability to create and support a sustainable economic system, which offers people the incentive to work and perform efficiently and also act ethically whenever they are in the line of duty. Failing to allow for ownership of private property is seen as a major reason for lack of individual motivation and corruption. On the other hand, in non-communist or capitalist societies such as the U.S.A., some would argue that the ability to own private property provides the necessary “motivation to work”. The choice for communist societies is that social welfare is more important of an objective than productivity.

Academic Research

Varela Pezzano, Eduardo, The Justification of Property Rights in Virtual Worlds (La Justificación de la Propiedad en los Mundos Virtuales) (Spanish) (July 21, 2010). Revist@ e-Mercatoria, Vol. 9, No. 1, 2010. Available at SSRN: https://ssrn.com/abstract=1646412. This paper asserts to justify the existence and recognition of intellectual property rights in virtual worlds.

Freyfogle, Eric T., Property Rights (October 31, 2012). Ray C. Anderson, ed., The Berkshire Encyclopedia of Sustainability, Vol. 10: The Future of Sustainability (Berkshire Publishing, 2012) . Available at SSRN: https://ssrn.com/abstract=2279088. Chapter Text concerning Property Rights

Katz, Larissa M., The Moral Paradox of Adverse Possession: Sovereignty and Revolution in Property Law (August 6, 2009). McGill Law Journal, Vol. 55, p. 47, 2010. Available at SSRN: https://ssrn.com/abstract=1444986. This article examines the role and justifications for adverse possession.

Chua, Jude, Austrian Reasons for Private Property Rights: A New Natural Law Retrieval of Hayek and Rothbard (November 1, 2013). Available at SSRN: https://ssrn.com/abstract=2362699 or http://dx.doi.org/10.2139/ssrn.2362699. This article takes an economic approach to the justification for property rights.

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