Professor Mark J. Perry's Blog for Economics and Finance
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Property rights and Pilgrims.Like the property rights of the Native Americans they met? Or of the planting corn seed they dug up and ate within days of arrival?I love discussions of property rights in the United States--at exactly what date do we wish to start recognizing property rights?I happen to believe property rights are necessary--including air and water rights and the right not be be polluted on your own land by others.But as for any moral virtue--oh, forget it, this land is stolen. We wiped out property rights on arrival.
"But as for any moral virtue--oh, forget it, this land is stolen. We wiped out property rights on arrival"...ROFLMAO!Oh boo! hoo! Think of it as Darwinian forces in action...
Attn. Benji, Regarding Property rights and Pilgrims,From The Phillips History of Fall River:"From the first they safe-guarded the land ownership rights of th eIndians. In some colonies the settlers claimed to own all they had dis -covered ; in others they recognized the ownership of the Indians, but placedno restrictions upon its purchase, so that many sales were procured byfraud, or for little or no consideration. In Plymouth Colony a colonist wasallowed to enter into negotiations with an Indian with reference to purchas eof his land, but he was not allowed to conclude the negotiations but had t oengage the colonial officers to complete the sale for him . The terms of salewere always carefully scrutinized . A few colonists disobeyed the law inthis respect, but they were severely punished. One fine of a thousandpounds, accompanied by a jail sentence, was meted upon a Tiverton manfor accepting a gift of land from his Indian friend."So, the Pilgrims did respect the property rights of the Native Americans according to the above account.What say ye now Benji?
"So, the Pilgrims did respect the property rights of the Native Americans according to the above account.What say ye now Benji?"Benji doesn't likely have anything to say about this. He's already aware of what you pointed out, but was hoping you were'nt. Acknowledging that property rights were respected in some cases renders his comment meaningless.
Benji is pretty typical of the left.When logical arguments fail, he appeals to emotion.Give me a break. Do these guys not know the history of the world? Every land, tribe and population we see today was at one time conquered and were conquerors. Why the Indians should be regarded any differently is beyond me.But, if the leftists really want to get into property rights...then give the Indians property rights to their own reservations. Where is the leftist cry to do that today? Nowhere. Because leftists care only about control and there is no level to which they won't stoop to get it.
Methinks lost me. Generally leftists abhor property rights and assume anyone who supports them is from the right. Protecting property rights sometimes doesn't cut it. Otherwise ill be happy to grab your house next year. The general history of honoring Indian contracts has been abysmal, and not just in the us.Yes some Indians may have got their land by conquest, but that does nnowjustify stealing it now.How does the pitiful leftist sentment to protect some property rights grant them any power, especially since we are discussing historical events?At least keep your dogma rants halfway sensible.
http://www.thefreemanonline.org/featured/europe-meets-america-property-rights-in-the-new-world/Provide a short history of colonial property rights
"Provide a short history of colonial property rights"Thanks for the link, Hydra, that's an interesting article. Was there a point you hoped to make with it? I'm taking a risk here in assuming that you read the entire article, and an even bigger risk in assuming that you understood it.The article makes a strong case for property rights as a basis for prosperity. Was that the point you wished to make? That's contrary to most of your previous assertions.I particularly liked the following from the article. I will spread my quote over 2 comments due to its length:"When the modern Peruvian economist Hernando de Soto set out to discover why some nations were rich and some were poor, he found that the legal and economic experts he consulted could not satisfactorily explain the success of the West. One reason, he determined, was what he termed the “missing lessons of U.S. history.” These lessons are not simply American, however, but universal lessons from history. What de Soto discovered was that the experts had failed to recognize the centrality of secure property rights in the development of the United States and the West in general. Rather, they mistakenly believed that prosperity grew out of the thicket of regulations and rules that exist today. Recapturing those missing lessons is important if we are to avoid inadvertently destroying the foundations of our freedom and prosperity."
Continued quote - This is the conclusion reached by the author regarding the importance of property rights:"Third, institutions that facilitate positive-sum transactions flourish. Such institutions produce peaceful and prosperous societies, a combination that is no accident. Property rights instantiate no particular vision of how property is to be used, leaving that to individual property owners to determine through voluntary transactions and so reducing social conflict over resources. Individual ownership in turn creates a powerful incentive for entrepreneurs who, envisioning a new, more valuable use for a piece of property, may purchase it and realize the gain. Change occurs peacefully in such circumstances because it is a byproduct of trade rather than the result of the decision of an autocrat. That peace and prosperity flow from property is the ultimate lesson, one that too few remember today."
I neglected to highlight an important concept in the first comment, so here it is:"What de Soto discovered was that the experts had failed to recognize the centrality of secure property rights in the development of the United States and the West in general. Rather, they mistakenly believed that prosperity grew out of the thicket of regulations and rules that exist today.
In some particular cases, Pilgrims may have paid for land, though it is in dispute whether the seller had the right to sell the land.In general, property rights have not been honored prior to the US government seizing the (or earlier state governments) land.If readers here wish to believe that Native American property rights, in large, were honored, that will rank with other right-wing fallacies and canards, such as creationism should be taught in place of evolution.
"In some particular cases, Pilgrims may have paid for land, though it is in dispute whether the seller had the right to sell the land."I would love to see your source for this. got a reference?Hydra has thoughtfully provided a link to this excellent article on property rights, which is the subject being discussed. Why are you throwing "right-wing" and "creationism" into the discussion? Try to stay focused. Here's a quote from that link:"Despite the claim to rights based on discovery, British colonists often acquired land by contract. For example, almost all of Massachusetts was acquired by purchase from local tribes. The primary exceptions there, Salem and Boston, were uninhabited areas, having been depopulated earlier by the diseases the colonists unwittingly brought with them."
My point was that the history and application of property rights is more nuanced than the black and white suggested in the post and these comments.I believe strong property rights are essential for prosperity. We need more and stronger property rights, and they should be economically and uniformly enforced to the extent that even petty fraud is not only impractical but simply socially unacceptable, like picking yuor nose.There is little value in a fraud law when you cannot afford to go to court. A tiny fraud is still a fraud, and repeated thousands of times it is a big crime.At some level we have to trust in "buyer beware" but that assumes a level of knowledge that is unrealistic.Such petty crimes result in class actions suits, which are either socialist or fair depending on which side you are on. But even a win in one of these things doesn't protect your rights: you may just get a coupon that allows you a discount if you buy another faulty product from the same manufacturor.Cite the case of a subdivision where every AC unit in the subdivision failed a month or two after the warranty ran out. To each owner the company shruggged its shoulders and said, too bad, we had a deal. But there was a night worker in the neighborhood and he observed the company repair truck at house after house.A class action ensued and then multiple clas actions from other subdivisions and it eventually almost ruined the company. So you buy something and you have a right to expect reasonable service from it. If not a right, you have case law on your side. I would argue that in this case the thicket of laws and regulations worked, and only because that night worker was able to gain knowledge that was not freely shared by the corporation.I argue that the thicket of regulations needs to be replaced with much simpler, more uniform, more comprehensive, and more discrete concepts of right and wrong - property rights - along with much more efficient, transparent, and predictable ways of enforcing them. In some respects this will mean more government: more property to be defined, described, recorded and protected. In other respects it will eliminate much of the current thicket of regulations.In other respects it means that capitalists will have to step up to the plate pay more attention to value and less to price. Yes, I know this is subjective, but the difference in cost for a 5 to seven7 year AC may be pennies to the manufacturor and thousands to the owner. It is a situation assymetric in cost and knowledge, and one the courts frowned heavily on.So, the only excuse for government is problems, and if we want less government it is incumbent on us as businesspeople to create less problems, and us as property owners to demand that we get and keep what we pay for.Many regulations don't regulate: they just create a fixed orifice where an adjustable valve is needed. The result is complaints, not so much about regulations as about stupid regulations, or cost inefficient regulations, or regulations that confer power more than public benefit.For these, I submit that new kinds of property rights could allow you to let the market trade on the costs and benefits of these regulations in such a way that an efficient level is maintained. And this would be based on property rights.
Benji:It is historical, what is to dispute about?When the original indians arrived through bering there was no one to take it from. Subsequently over a thousands of years tribes developed and acquired land by conquest. But the whole concept of ownership was different, and probably tribally held or communistic in nature. As an indian, I might plant a crop of corn, and that was mine as long as I used it. Once abandoned, it was available for anyone in the tribe again.Or, consider the royal grants, which were originally renewable only by roya permission, but over time, this formality was simply ignored.The important point in tansfer is that both parties believe it is legitimate: thats why we have title insurance today.We can agree that the indians were treated badly in many cases, and even today claims are still being settled, not only here but in Australia, New Zealand, and Africa.I don't see what that has to do with the present discussion.
Trivial example:Rapid lube has a sign that says oil change $19.95. After you get the oil change the bill is $49.95.The sign is fundamentally dishonest, it should say oil change labor, $19.95 or Average Oil Change $49.95. Or something.Why doesn't every person who goes in there complain long and loud about this practice? I do, and every time there is a waiting room of people nodding in agreement.Why doesn't Rapid Lube learn? Because they make money off this dishonesty, they know that most people won't walk out, once they have gone to the trouble of arriving. And, most people understand the sign does not mean what it says: we have accepted dishonesty.It is a petty thing, but thousands of these add upp to millions of dollars in transactions that might have been decided differently.I think we can do better.
[Rapid Lube $19.95 oil change] "Why doesn't every person who goes in there complain long and loud about this practice? I do, and every time there is a waiting room of people nodding in agreement."Listen to yourself! Your comment says it all. "Every time"? You keep going back even knowing about this discrepancy. The free market solution is for you and everyone else who is unhappy with this, to go somewhere else. There is plenty of competition. If enough people don't go back, they will change their ways or go out of business.What exactly IS your complaint? Is it the price you pay for service, or the deceptive sign? Based on your actions - going back - it must just be that you like to whine about the sign. you already know what your oil change will cost when you go in. Vote with your dollars, and quit whining. I'm not a Rapid Lube or Jiffy Lube or whoever fan, and I would never go there, but this has got to be one of the lamest examples I've ever heard."...they know that most people won't walk out, once they have gone to the trouble of arriving. And, most people understand the sign does not mean what it says: we have accepted dishonesty.It's only dishonest if you trust the sign, and you don't. How have you been damages? What is your loss? You obviously like the actual price of the oil change as you keep going back.It's YOU who can do better. Write something meaningful for a change.
"Cite the case of a subdivision where every AC unit in the subdivision failed a month or two after the warranty ran out."Yes, please DO cite the case. I'd be interested in reading about it, or is this just more unsubstantiated fantasy from you?Why do you believe a manufacturer should be liable for something past the warranty period?You're aware that you can purchase a homeowner's insurance policy that will pay for just this type of loss, right?If this were an AC unit you were buying yourself, you could choose to pay more for a better unit with a longer warranty, or you could buy an extended warranty. You do understand, don't you that the cost of a warranty is part of the price you pay for an item, right
Why do you believe a manufacturer should be liable for something past the warranty period?If it was a defect they learned about or knew about (and simply relied on inertia to get by), they should be taken to task. Especially if they designed it to not last much longer than the warranty period. Just like about any manufacturer that gets caught doing it.
"Especially if they designed it to not last much longer than the warranty period"...Planned obsolescence eh sethstorm?Just curious but what do you know about manufacturing and materials engineering?
"Especially if they designed it to not last much longer than the warranty period."Sethstorm, you forgot to include the part that they priced it to not last much longer than its warranty period. You need to include a lifecycle cost analysis into your buying decisions to compare different costs between mutually exclusive purchases. Only after doing so, can you make an informed buying decision. To perform a lifecycle cost analysis, you simply take the first-cost price (purchase price) and add each year's maintenance costs and other yearly costs (which is usually an increasing gradient by percentage or dollar amount each year) and then subtract the salvage price. You then take that amount and divide by the expected years the product will last or you plan to own it for each different product. You can then use these analyses to compare different products/machines.Of course, the lifecycle cost analysis does not include qualities such as the enjoyment factor of owning a Corvette instead of a Cobalt, but you will have to figure out yourself how much value that adds to your purchase (there can also be tax consequences such as deprecation).Cheaper is not always better, and more expensive is not either. At least if you perform an analysis you will have another factor you can use to decide what to buy.
I forgot to mention you also have to include the costs to operate the equipment such as electricity into the analysis. Often a more efficient piece of equipment (usually more first-cost expensive) will pay for the premium before its lifetime and then you start making money you can subtract from the costs (expected life - payback period).
I don't go all that often, usually when I have run out of time to do it myself. Every time ive pulled off the loud routine actually boils down to twice. As for competition, most lube shops have some version of the same thing. I think free market also means free to complain loud and long, but this story shows that more than several people agreed with me. But none of them took any action.It only proves a major flaw in your free market theory. The choices you have may be as bad or worse. If there are any.
What is my loss?I said it was a trivial example.Someone pulls off the street taking the sign at face value. When he discovers it is a fraud he leaves. He has lost ten minutes of his precious life. If he has a stroke of apoplexy over rapid lubes unmitigated gall, he could conceivably lose his life.The sign is a lie but Rapid lube profits from it.I think free enterprise can and should hold itself to a higher standard than this.And this is a trivial example.
You need to understand what a warranty is. Most warrantees are written to limit rights you would have under law absent the warranted. Manufacturors have often been held to repairs after the warranted in cases of numerous and or repeated failures which violate a reasonable expectation of service.
It is a real citation, happened in prince Georges county MD. Reported in wapo. I think the manufacturor name began with "p". Don't recall all the particulars so the story may not be 100%.Doesn't matter if it is all or partly hypothetical. Ever read the letters between Neils Bohr and Albert Einstein? The theory of relativity was developed based on theoretical gedanken experiments.
Walt is entirely correct about cost analysis. But it proves my point. In a free market as ron describes it, the consumer is always at a disadvantage. Free doesn't mean equal, nor should it. But free doesn't mean free to lie, obfuscated, not disclose the truth, and generally chisel, either. Every freedom has an equal and opposite obligation.Ron, however is wrong. Market mores mean that warrantees for similar products are generally similar. You cannot buy a water heater with a 20 year warratee, at any price. If you could, the cost of the warranted would include the cost of a new water heater. By ron's reckoning, you buy a product, and insurance on the product. Which is fine if the manufacturor is still around when you need to collect, if you still have the receipt, and the original box bar code, and the name address and phone number of the sales associate.I'd fathered just get something that works and lasts reasonably. And can be repaired when it doesn't.Mostly, those things no longer exist.
Benjamin is right about one thing, whenever you talk about property rights you have to start sometime. Benjies view seems to correspond to God given rights, back to time zero. That's fine but we have no way to adjudicate them today.In Oregon proposition 13 set out to make restitution for property rights abrogated by various environmental laws enacted over the years. Under its rules you were entitled to either restitution or exemption dating back 25 years, or as long as you could show inheritance. If you bought property after a rule was in effect, tough luck.It seemed to me to be a fair law, and it withstood court challenges. It was overturned by a subsequent iniative with heavy out of state funding. Some claimed the wording was misleading.The original statewide land use/conservation law called for restitution on property rights, but how that was to be done was a sticking point. The law was passed with the explicit understanding that compensation would be addressed in the next session.
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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