Chapter 8: Property and real rights
Property has already been mentioned several times in the preceding chapters. In Chapter 3 on human interaction (games), we saw that where a group of miners becomes too large for mutual surveillance to work there is a danger of free riding, which may lead to conflict. Individual property is one institution to avoid such conflict. In other contexts, property provides a way out of the collective ruin that would result from persons fighting over a scarce but indivisible resource (as in the example of the colouring book). In the chapter on the Coase Theorem, an externality was analysed as conflicting uses of an object the property rights on which do not (yet) govern such uses. Once the rights are duly extended to cover such uses, the externality is ‘internalised’ and persons concerned can then shift objects or particular uses of them towards the person for whom they are the most valuable. In these illustrations property plays a coordinating, pacifying, even civilising role as a means of managing scarcity. Emergent scarcity was mentioned in Chapter 3 in the discussion of the film The Gods Must Be Crazy. The Coke bottle creates a new problem of scarcity: there are too many competing demands for its use.
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