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Woodcock, Ramsi A. --- "Property, efficiency, the commons, and theft" [2015] ELECD 1336; in Mattei, Ugo; Haskell, D. John (eds), "Research Handbook on Political Economy and Law" (Edward Elgar Publishing, 2015) 531

Book Title: Research Handbook on Political Economy and Law

Editor(s): Mattei, Ugo; Haskell, D. John

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781781005347

Section: Chapter 31

Section Title: Property, efficiency, the commons, and theft

Author(s): Woodcock, Ramsi A.

Number of pages: 32

Abstract/Description:

It is easy to get the impression from reading economics that property generally, and property in ideas in particular, is efficient. This impression is meaningful because it suggests that there is no efficiency rationale for government regulation of any kind other than the institution and defense of a property system itself. The purpose of this chapter is to explain why this impression is false. The chapter shows that two stories economists tell about the efficiency of property, the Tragedy of the Commons and what I call the Parable of Theft, do not establish that property or intellectual property is efficient. In the Tragedy of the Commons, an owner lacks the power to keep the crowd away from her valuable resource. As a result, the crowd overuses it, making everyone worse off. In a classic example, the inability to enclose a grassy spot of land results in its overgrazing by herders of cows. In the Parable of Theft, a producer lacks the power to keep thieves away from her output, so thieves take it. As a result, the producer lacks an incentive to produce, and shuts down her operation, making society worse off. The moral of both these stories is that the power to exclude others from things is necessary and sufficient for efficiency. If you have the power to keep the crowd off the commons, then you will preserve it.