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Recognizing Property Rights - Explained

The Government's Role in Property Ownership

Written by Jason Gordon

Updated at September 23rd, 2021

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Table of Contents

Why does the US Government allow people to own property?Why would a system establish ownership of property rights?DiscussionAcademic Research

Why Is There Ownership of Property?

Simply put, it creates the incentive structure necessary to maximize individual and collective productivity. 

This topic is discussed further below.

Next Article: Legal System Promotes Property Rights Back to: INTRODUCTION TO LAW

Why Have 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. 

Related Concepts

  • What is "property law" or "property rights?
  • What is "ownership"?
  • How the law protects property rights?

Discussion Question

These theories underlie two contrasting, yet common, forms of government: Communism and Capitalism. Communism centralizes the 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 in land and industry. How do you think these forms of government affect 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. 

  • Communism is a form of government in which the government reserves the sole right 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 Justificacin 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. 
property rights property rights recognition

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