I’m blogging this week about my new book Natural Property Rights, published with Cambridge University Press and available for purchase now digitally and in hardbound version, at a variety of bookstores. On Monday,, I summarized the book’s normative theory. Yesterday, I explained how the theory applies to acquisition law and policy, and what happens when a community chooses to ignore the moral constraints associated with natural law.
Today, I’ll explain how the theory applies to ownership, leases, … and the arcane estates and future interests used in American and “Anglo-sphere” legal systems. Along the way, I’ll also consider some familiar critiques of property, by scholars who think that property threatens social and political equality.
Let me start with ownership. Ownership constitutes a relatively specialized form of property. Ownership supplies the model for property in land. Land owners are entitled to sue trespassers for trespassing whether or not they damage the premises and whether or not the owners are actually using the land. But ownership does not supply the model for property in water rights (rights to the use of river water and its flow). Water-rights holders cannot complain that others are interfering tortiously with their rights unless those others interfere with ongoing water uses. The rights to alienate or assign property come automatically with ownership; they don’t attach automatically to usufructs.
But even though ownership is only one form of property, it is probably the most familiar form. Most people associate “property” with their personal possessions, their real estate, and their wealth. All of those resources can be owned.
And ownership makes property controversial. How is it just for one person to exclude everyone else from resources everyone could use? As I’ve explained in my earlier posts, a natural property right is qualified by a sufficiency proviso. How is it fair for an owner to exclude others who have rights corresponding to the sufficiency proviso? Questions like these have been asked by many writers and scholars— Pierre-Joseph Proudhon 200 years ago, and Joe Singer and Jeremy Waldron relatively recently.
But those questions assume a mistaken premise—that property doctrines need to track moral rights in every detail. Speed limits can secure rights to travel and to be safe even though they stop some drivers from driving fast when they can do so safely. So too for ownership. Even if, on paper, the sufficiency proviso seems violated by trespass and other doctrines that give owners managerial authority far beyond what they need to use what they own.
The case for ownership goes like this. In principle, all the people in a community are entitled to acquire and use reasonable shares of the resources the community controls. In principle, though, those natural rights are mere usufructs. So every person who started foraging land could keep foraging it, subject to others’ claims under the sufficiency proviso. And no one would have very secure rights to assign away or receive others’ usufructs. Even though ownership excludes everyone but the owner from the resource owned, it gives everyone opportunities to hold and use other resources much more securely. And, more secure freedom to acquire or assign away those resources.
So ownership can be justified if, after it’s instituted, people get more opportunities in practice to use the possessions they own productively, or to acquire new resources that they didn’t own. Although the case for ownership is implicitly empirical, it is understandable and superficially plausible. The main driver in the case is Locke’s argument: Ownership gives owners broad managerial authority. That authority encourages them to labor productively, and that productivity “over-ballance[s] the Community” of goods that would exist in a regime of open access and usufructs. The sufficiency proviso can be satisfied in substance. If enough owners produce new resources for people who don’t have them. And if people who don’t own shares of some resource can acquire the shares they need by work, saving, and purchase.
Property law can respect the sufficiency proviso even more. Some doctrines limit ownership to respect sufficiency interests—common law common carrier principles, or doctrines that recognize public rights of way to traverse private land. But property law respects the sufficiency proviso most in two ways.
First, ownership creates clear, secure rights to assign and receive property. And second, property law expands the options owners have to subdivide their property. When an owner builds an apartment building with 100 units, 100 renters get housing satisfying their interests under the sufficiency proviso. When a landowner passes on a present estate and several future interests, the recipients of all the various interests get secure rights to acquire and use the land consistent with their sufficiency interests.
In current scholarship, though, there isn’t any satisfying normative theory why property law should recognize proprietary rights more limited than ownership rights. (In what follows, I’ll call all of those limited rights “component rights”; a life estate and a reversion “compose” a fee simple when they’re put back together.) What scholarship there is relies on rough utilitarian interest-balancing. Natural rights account for the relevant concerns better, because they focus more on the rights of the people threatened most by different property rights.
Any new component right affects the rights of three distinct classes of people. The first class consists of owners. Clearly, component rights give owners ways to exercise their property rights more effectively and productively. When apartment owners make money off of rentals, if they use the rent productively they use the leaseholds productively, too. When someone passes land along to relatives through a life estate and future interests, property law helps her derive productive use from it—the sociable uses she’ll get from helping her relatives survive and thrive.
Any new component right must also respect the rights of the people who stand to receive leaseholds, present possessory estates, and other component rights (here, “assignees”). But component rights obviously respect the rights of assignees. The more property rights there are to go around, the more the sufficiency proviso is satisfied.
When a legal system recognizes a new component right, though, it also threatens the rights of people who don’t stand to receive the right. Here, I’ll call such people “third parties.” And a lot the doctrines in a 1L Property course protect the rights of third parties.
To begin with, people who don’t hold property in a resource have rights of notice—to know who does have rights in the resource, and what they need to do to avoid violating those rights. These notice rights are the flip sides of the claim-communication requirement.
To provide that notice, a state needs to establish reliable rules confirming that owners have created and assigned leases or other component rights. Statutes of Frauds do that. A state also needs to make it reasonably easy for neighbors and other third parties to know who has what rights in an owned piece of property. Recordation statutes do that. A state also needs to stop owners from creating property rights that are so specialized and strange that no one else will be able to understand or obey them. An obscure doctrine, called “the numerus clausus principle” (Latin for “the number is closed”) takes care of that.
Separately, when an owner assigns component rights to a group of assignees, the assignments threatens rights that arise out of the sufficiency proviso. It is far easier to acquire property from one person who owns it than from several people who hold different fractionated rights in it.
As with claim-communication concerns, property law addresses sufficiency concerns in many different ways. Assume that an owner assigns away present estates and future interests but insists that anyone who takes the premises must use it for a few specific uses. The use-restriction may be declared illegal and void as against public policy. That doctrine tries to protect the sufficiency interests of the people who might acquire the land later.
Separately, the Rule Against Perpetuities purges out of a property system future interests that won’t clearly vest or fail within 21 years after everyone alive at the conveyance dies. The Rule is a formalistic and blunt tool, and it may be an ineffective tool. But it has a reasonable goal, to get rid of conveyances that seem likely to cloud title in a lot in the future. Whether the Rule advances that goal well, it is at least trying to satisfy rights associated with the sufficiency proviso.
Today, I’ve discussed the legal rights of possession and disposition that usually run with ownership. But the right to use a resource also runs with ownership. Tomorrow, I’ll discuss use rights—in nuisance, and in servitudes. And since nuisance examples loom large in law and economic scholarship, tomorrow I’ll contrast natural rights and economic analyses of nuisance as I contrasted rights-based and egalitarian accounts of ownership today.
